Modernizing VATs in Africa

366 Pages·2019·1.691 MB·English

by  Sijbren Cnossen

OUP CORRECTED PROOF – FINAL, 24/06/19, SPi
Modernizing VATs in Africa
OUP CORRECTED PROOF – FINAL, 24/06/19, SPi
OUP CORRECTED PROOF – FINAL, 24/06/19, SPi
Modernizing VATs
in Africa
SIJBREN CNOSSEN
University of Pretoria &
CPB Netherlands Bureau for Economic Policy Analysis
1
OUP CORRECTED PROOF – FINAL, 24/06/19, SPi
1
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OUP CORRECTED PROOF – FINAL, 24/06/19, SPi
To my VAT students in the Master’s Programme in Taxation
of the African Tax Institute at the University of Pretoria
OUP CORRECTED PROOF – FINAL, 24/06/19, SPi
OUP CORRECTED PROOF – FINAL, 24/06/19, SPi
One [general lesson] is the political difficulty of making sensible
changes to a VAT once it has been introduced: mistakes made at
introduction are hard to undo.
(Keen, 2009)
We all now know that good VAT design makes good VAT adminis-
tration easier and that bad design may make good administration
almost impossible.
(Bird and Gendron, 2007)
Efficient regressive taxes (such as the VAT) when combined with
generous well-targeted transfers can result in a net fiscal system that
is equalizing.
(Lustig, 2017)
OUP CORRECTED PROOF – FINAL, 24/06/19, SPi
OUP CORRECTED PROOF – FINAL, 24/06/19, SPi
Contents
List of Figures xi
List of Tables xiii
List of Boxes xv
1. Why VAT? 1
2. What Is VAT? 14
3. Other Broad-Based Consumption Taxes 27
4. Overview of VATs in Africa 41
5. Countries without VAT 53
6. Revenue Performance 62
7. VAT Incidence and Rate Structure 77
8. Economic Integration and Tax Coordination in 103
Regional Economic Communities
9. Exemptions and Exclusions: The Achilles Heel of VAT 121
10. Non-Standard Exemptions and Zero Rates 132
11. Governments and Activities in the Public Interest 154
1 2. Immovable Property 178
1 3. Financial Services 193
1 4. Insurance 222
15. Lotteries and Gambling 237
16. Small Businesses and Farmers 244
17. Basic Administrative Processes 265
18. Agenda for VAT Modernization 275