營(yíng)業(yè)稅改增值稅英文文獻(xiàn)

1、Comparing the Value-Added Tax to the Retail Sales TaxFor Richard F. Dye , Therese J. McGuireJournal of Public EconomicsApril 2011Overview of VATMore than 130 countries use VAT as a key source of government revenue. VAT is a general, broad-based consumption tax assessed on the value added to goods an

2、d services. VAT is generally levied on value added at every stage of production, with a mechanism allowing the sellers a credit for the tax they have paid on their own purchases of goods and services (input tax) against the taxes collected on their sales of goods and service (output tax). Generally,

3、 V AT is: A general tax that applies to all commercial activities involving the production and distribution of goods and the provision of services; A consumption tax ultimately borne by the consumer; An indirect tax levied on the consumer as part of the price of goods or services; A multistage tax v

4、isible at each stage of the production and distribution chain; and A fractionally collected tax that uses a system of partial payments whereby a seller charges VAT on all of its sales with a corresponding claim of credit for VAT that it has been charged on all of its purchases.There are three method

5、s of calculating VAT liability: the credit-invoice method, the subtraction method, and the addition method. This column deals with only the credit-invoice method, which is the most widely used. The credit-invoice method highlights the V AT defining feature: the use of output tax (tax collected on sa

6、les) and input tax (tax paid on purchases). A taxpayer generally computes its VAT liability as the difference between the VAT charged on taxable sales and the VAT paid on taxable purchases. This method requires the use of an invoice that separately lists the VAT component of all taxable sales. The s

7、ales invoice for the seller becomes the purchase invoice of the buyer. The sales invoice shows the output tax collected and the purchase invoice shows the input tax paid. To summarize, taxpayers use the credit-invoice method to calculate the amount of V AT to be remitted to the taxing authorities in

8、 the following manner: Aggregate the VAT shown in the sales invoices (output tax); Aggregate the V AT shown in the purchase invoices (input tax); Subtract the input tax from the output tax and remit any balance to the government; and In the event the input tax is greater than the output tax. The Uni

9、ted States is the only member of the Organization of Economic Cooperation and Development that does not levy a VAT on a national level; however, VAT has become widely recognized as an important option in federal tax reform debates.Indirect taxes such as value added taxes (VAT) generate a substantial

10、 part of tax revenue in many countries. In fact, VAT systems generate a quarter of the worlds tax revenue. Nearly 130 countries now have a VAT system (with over 70 countries having adopted the system during the last 10 years) (Keen and Mintz 2004). More focus on internationally mobile tax bases has

11、drawn attention to directing more of the tax burden to indirect taxes such as consumption taxes or VAT systems, and less to income taxes, especially capital income (Gordon and Nielsen 1997). During the harmonization of EU taxes, indirect taxes, and VAT systems received much attention (Fehr et al. 19

12、95). A general VAT law covering all private goods and services characterizes the current EU system, but there are still many exemptions from this general instruction.Such a VAT system also exists in Norway as a consequence of the Norwegian VAT reform in 2001. The reform introduced a general VAT law

13、on services, but many exemptions are still specified.There are several arguments in favor of a general and uniform VAT system, compared with imperfect, nonuniform (and nongeneral) systems. Such a system may improve economic efficiency and reduce administration costs, rent-seeking and fraud activitie

14、s by industries that lobby for lower rates and zero ratings (Keen and Smith 2006). A general and uniform VAT system equals a uniform consumer tax on all goods and services. Such a system also implies that the producers5 net VAT rate on material inputs equals zero, irrespective of the rate structure.

15、 This is optimal according to the production efficiency theorem (Diamond and Mirrlees 1971a, 1971b).A VAT system with exemptions violates the production efficiency theorem because taxation of intermediates will differ between industries. On the other hand, industries that are covered by the VAT syst

16、em but have lower rates or zero ratings on their sales are favored because they can withdraw expenditures to VAT on intermediates at full rates and only levy reduced or zero rates on their sales.A general and uniform VAT system may also have positive effects on the distribution of welfare among hous

17、eholds. If the initial situation is characterized by a VAT on most goods but only on a few services, the introduction of a uniform rate on all goods and services may improve the distribution of welfare because services5 share of consumption increases with income.Keen (2007) points to the lack of int

18、erest in value added taxation from the theoretical second-best literature in spite of the VATs popularity in practical tax policy. As mentioned above, VAT systems are in general not uniform. Theoretical analyses demand relatively simple models and simple tax structures to be analytically tractable.I

19、n practical policies, the structures of the economy and the tax systems are quite complex, and there is a need for detailed numerical models in order to analyze the effects of different VAT systems. This paper contributes to the literature by analyzing the welfare effects of an imperfect extension o

20、f a nonuniform VAT system, and comparing different imperfect, nonuniform VAT systems with a uniform and general VAT system within an empirically based dynamic computable general equilibrium (CGE) model for a small open economy. This model mirrors a real economy, Norway, and differs in many respects

21、from the more simple theoretical models that fulfill the assumptions of normative tax theory and recommend uniform commodity taxes, combined with no input taxation.In our analyses, we ask the following questions. Can the introduction of a nonuniform VAT system including only some services make the e

22、conomy worse off than having a VAT system only covering goods and in that case, why? Such reforms characterize both the Norwegian VAT reform of 2001 and the EU VAT reform from the late 1990-ties. Will an additional extension to a uniform and general VAT system be welfare superior to the nonuniform (

23、and nongeneral) VAT systems and what are important preconditions? As will be explained below, one cannot on purely theoretical grounds establish the welfare rankings of such VAT systems when there are preexisting distortions as tax wedges and market power in the economy. The baseline VAT system is a

24、 nonuniform VAT system mainly covering goods. This baseline VAT system is then compared with (1) the extended nonuniform Norwegian VAT reform of 2001, and (2) a general VAT system characterized by a uniform VAT rate on all goods and services, including public goods and services. The Norwegian VAT re

25、form of 2001 was a step in the direction of a general VAT system by including many services, but there are still many exemptions, zero ratings and lower rates. In particular, the VAT rate on food and nonalcoholic beverages is half the general VAT rate. The policy reforms are made public revenue neut

26、ral, and changes in lump sum transfers as well as in the system specific VAT rate are studied. With a revenue-neutral change in the system-specific VAT rate, the VAT systems can be ranked with respect to welfare effects.Ballard et al. (1987) and Gottfried and Wiegard (1991) analyze the welfare effec

27、ts of different VAT systems including tax exemptions and zero ratings in static CGE models. The separability and homogeneity assumptions in their consumer demand models favor a uniform VAT system, which is supported in their policy simulations. In contrast, our model is an intertemporal CGE model fo

28、r a small open economy without strict homogeneity assumptions in consumer demand. Our model is well designed for analyzing VAT reforms because it distinguishes between many industries, input factors and consumer goods and services. The modeling and parameters in the consumer demand system and the pr

29、oduction technology are all the results of comprehensive micro- and macroeconometric analyses of Norwegian data. The model has a detailed description of the Norwegian system of direct and indirect taxes.Specifically, net VAT rates on the input factors and gross VAT rates on the consumer goods and se

30、rvices are included in the model. We disregard the effects on costs of administration, rent-seeking and distribution of welfare among households. The model emphasizes the small open economy characteristics by using given world market prices and interest rates. Imperfect competition is present in the

31、 domestic markets. A uniform and general VAT system is not a priori the most efficient in our model.When comparing the two different nonuniform VAT systems, our analysis shows that an imperfect extension of the VAT system to cover more services is welfare inferior to the baseline nonuniform VAT syst

32、em only covering goods. Obtaining efficiency in production is empirically important for the welfare effects of the different VAT systems. An imperfect extension of the VAT system reduces efficiency in production because intermediates will be taxed differently for different industries. Consumer effic

33、iency is also reduced due to lower VAT on inelastic goods and higher VAT on elastic services. Introducing a general and uniform VAT system is not obviously welfare superior in a distorted economy, but we find that such a system improves welfare compared to the other imperfect regimes. A significant

34、empirical advantage of the general and uniform system, which is revealed by the computations, is also its ability to reduce initial wedges in deliveries to the export and domestic markets.General VAT ComputationTo see VAT in action, consider Exhibit 1 on p. 612, which provides a simple illustration

35、of how VAT is implemented in the production of bread. A farmer grows and sells wheat to a miller, who grinds the wheat into flour. The miller sells the flour 2 to a baker, who makes the dough and bakes the bread. The bread is then sold to the grocer, who sells the bread to the final consumer. In eac

36、h stage of bread production, value is added by the seller, and VAT is levied on that amount. To ensure that VAT is levied only on the value added by the producer, V AT uses the credit-invoice mechanism. Thus, on selling the bread to the grocer, the baker collects $30 in V AT and claims an input cred

37、it of $15, the VAT paid when the baker purchased flour from the miller. The baker ends up remitting a net VAT liability of $15 to the tax authorities. The total revenue created by V AT is the sum of VAT liability collected in each stage of bread production, in this case $50. Although VAT is a broad-

38、based general consumption tax (i.e., it applies to all final consumption), there are instances when the application of VAT is avoided. For example, in a pure VAT state, the tax base would theoretically include services rendered by the government, isolated sales of ones personal effects, and sales of

39、 personal services; however, no nation employs a V AT with this tax base for administrative, political, or social reasons (Schenk and Old man at 46). Thus, VAT provides exemptions or applies zero tax rating to certain transactions. Exemption means that the trader does not collect V AT on its sales a

40、nd does not receive credits for V AT paid on its purchases of inputs. Zero rating means that a trader is liable for an actual rate of V AT, which happens to be zero, and receives credit for input VAT paid. Like transactions, potential taxpayers can be exempt or zero rated. An exempt trader is not pa

41、rt of the V AT system and is instead treated as a final purchaser. A zero-rated business does not collect V AT on sales but is compensated for any input VAT it pays.However, if the exemption occurs at the last stage of production, there is a corresponding decrease in VAT revenue because there is no

42、shifting and increase of tax burden; the value added at the final stage simply escapes from V AT. As shown in Exhibit 3, exempting the grocer from VAT means the grocer would not collect VAT and would not be able to claim credit for the tax it paid on its purchase. The exemption at the last stage mea

43、ns that the grocer would become the final consumer of the bread. As a final consumer, the grocer would pay the V AT as part of the purchase price. No shifting and increase of tax burden would occur because the grocer would not be able to pass on the tax it paid from its input. An exemption occurring

44、 at the last stage of production means that the chain of input credits would cease at the stage prior to the last stage. Any value added after the bakers stage would simply escape the V AT, resulting in a decrease in government revenue due to the exemption.Overview of Retail Sales and Use TaxBefore

45、considering some of the similarities and differences between VAT and the retail sales tax (RST), this column next considers a typical retail sales tax system. The retail sales and use tax imposed by U.S. states is generally levied on all retail sales of tangible personal property that are not explic

46、itly exempted. For services, only those explicitly enumerated are taxable (Warren, Gorham and Lamont 1998). The tax is generally stated on the sales receipt and is collected from the consumer at the point of sale. The retailer is responsible for remitting the tax collected to the tax authorities. In

47、 3 theory, retail sales tax is a single-stage tax imposed on the ultimate consumer, which means that the tax should apply only to final sales for personal use and consumption. Accordingly, intermediate transactions in the economic process are excluded from the scope of the sales tax. Using the same

48、bread production example above, sales tax would be imposed only on the final stage of production as the grocer is selling the bread to the ultimate consumer. However, under the U.S. sales tax system, the general sales tax is not confined to transfers to ultimate consumers of final products manufactu

49、red in the economic process. For example, absent an exemption, sales tax is imposed on the bakers purchases of supplies for the trucks it uses to deliver the bread to the grocer. The reason behind the taxation is that the truck supplies do not form part of the bread and the baker is considered the u

50、ltimate consumer of the supplies. However, to achieve some semblance of a balanced retail sales tax, many states sales taxes exclude or exempt many intermediate transactions.The 1994 Tax Sharing ReformThe fiscal reform of 1994 was a fairly comprehensive package of measures designed to address three

51、areas of concern: to stem the fiscal decline and provide adequate revenues for government, especially central government; eliminate the distortionary elements of the tax structure andincrease its transparency; and revamp central-local revenue sharing arrangements. Among its key provisions was a majo

52、r reform in indirect taxes that extended the value-added tax (VAT) to allturnover, eliminating the product tax and replacing the business tax in many services. It simplified the tax structure and unified treatment of taxpayers for some taxes.The centerpiece of the package was introduction of the Tax

53、 Sharing System (fenshuizhi), which fundamentally changed the way revenues are shared between the central and provincialgovernments. Under the Tax Sharing System (TSS), taxes were reassigned between the centraland local governments. Central taxes (or central fixed incomes) include customs duties, th

54、e consumption tax, VAT revenues collected by customs, income taxes from central enterprises,banks and nonbank financial intermediaries; the remitted profits, income taxes, business taxes ,and urban construction and maintenance taxes of the railroad, bank headquarters and insurance companies; and resource taxes on offshore oil extraction. Local taxes (or local fixed incomes)consist of business taxes (excluding those named above as central fixed incomes), income taxesand profit remittances of l