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Effective VAT Rates on Selected Sectors in Tanzania: An Input-Output Approach.
African Journal of Finance and Management
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| Title |
Effective VAT Rates on Selected Sectors in Tanzania: An Input-Output Approach.
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| Creator |
Mugoya, Patrick KD
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| Description |
One of the key issues in designing a VAT system is the desirability or otherwise of a uniform rate structure. From an economic efficiency point of view, as well as distributional considerations, non-uniformity is deemed more attractive than uniformity. Administrative feasibility, on the other hand, usually poses a strong case in favour of uniformity. In Tanzania VAT is imposed at a uniform rate of 20 percent on all taxable supplies of goods or services, except exports, which are zero-rated. This study estimates, by the use of an Input-Output approach, the extent of variation in the effective VAT burden falling on different sub-sectors of the Tanzanian economy. Since optimal taxation theory implies the superiority of rate differentiation over rate uniformity it is important to establish empirically the extent of effective non-uniformity in a tax system that is mainly statutorily uniform like the Tanzanian VAT. In the final analysis, indeed, what actually matters to economic entities is not the rate of tax specified in the legislation (i.e. statutory rate), but rather the burden borne by the entities in different sectors or sub-sectors of the economy. African Journal of Finance and Management Vol.7(2) 1999: 144-153 |
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| Publisher |
Institute of Finance Management, 1999
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| Date |
1999-02-01
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Article — |
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| Format |
application/pdf
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| Identifier |
http://www.ajol.info/index.php/ajfm/article/view/24355
10.4314/ajfm.v7i2.24355 |
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| Source |
African Journal of Finance and Management; Vol 7, No 2 (1999); 144-153
0856-6372 |
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| Language |
eng
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| Relation |
http://www.ajol.info/index.php/ajfm/article/view/24355/20321
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| Rights |
Copyright for articles published in this journal is retained by the journal.
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