Of VAT and Tax Reform

The next government will be faced with the task of running a difficult country with a terrible history. It will need to pay for the promises made during election season, while building vital infrastructure for a sparsely distributed population. The VAT accounts for 25.2% of all current revenues in 2013. The total VAT collected in 2013 was $34.4 billion and total current revenues amounted to $136.5 billion. For the same year companies pay a total of $30.9 billion and personal income tax was $15.2 billion. Excise tax amounted to $27.3 billion, import duties $11.8 billion, property tax $2.6 billion and the travel tax $1.5 billion.

The VAT, therefore, accounts for about a quarter of central government’s current revenues. This implies an agenda of tax