The govt that slapped VAT on its citizens smiles

Posted: September 5, 2013 in General
Tags: , ,

Implementation of the VAT Act 2013 seem to be realising more challenges than the noble intentions behind it.So what indeed is VAT dragon that has got everybody talking & what are its implications…..we sought to explore imagegs
A value added tax (VAT) is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the value added to a product, material, or service, from an accounting point of view, by this stage of its manufacture or distribution. The manufacturer remits to the government the difference between these two amounts, and retains the rest for themselves to offset the taxes they had previously paid on the inputs.

The purpose of VAT is to generate tax revenues to the government similar to the corporate income tax or the personal income tax.

The value added to a product by or with a business is the sale price charged to its customer, minus the cost of materials and other taxable inputs

Advantages Of Value Added Tax (VAT)


heavy-tax-burden
1. As compared to other taxes, there is a less chance of tax evasion. VAT minimizes tax evasion due to its catch-up effect.

2. VAT is simple to administer as compared to other indirect tax.

3. VAT is transparent and has minimum burden to consumers as it is collected in small fragments at various stages of production and distribution.

4. VAT is based on value added not on total price. So, price does not increases as a result of VAT.

5. There is mass participation of taxpayers.

Disadvantages Of Value Added Tax (VAT)
imagzes

1. VAT is costly to implement as it is based on full billing system.

2. VAT is relatively complex to understand. The calculation of value added in every stage is not an easy task.3. To implement the VAT successfully, customers, need to be conscious, otherwise tax evasion will be widespread.

The Kenya Revenue Authority wants us to respect the law and pay VAT. imagdes

If we want development so that we can have better services and better lives, we need to pay taxes to fund these developments so that our wants can be met. The government need money to fund key projects so that it can keep up with the pace of the other countries. Slowly as we wake up to the reality of higher cost of living, one thing is clear.The government has also taxed our smiles-Nothing to smile about!

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s