Widely regarded as an invention of Continental Europe, and its paternity in 1954 attributed to France, VAT is an indirect tax collected mainly by businesses but borne by consumers. The term VAT itself is misleading because value as in Value-Added means no more than the cost and mark-up added at each stage in the production/distribution chain.

VAT’s rapid growth has often been described as the most dramatic and probably the single most important fiscal development in the area of taxation in the latter half of the twentieth century. In fact, while in the late 1960s less than ten countries utilised any form of VAT, according to the Organisation for Economic Co-operation and Development (OECD), some 166 countries operated VAT or General Sales Tax (GST) in 2016. Other jurisdictions are recent adopters, such as Malaysia and Tanzania (2015), Egypt (2016), India (2017) and Member States of the Middle East’s Gulf Cooperation Council (2018).

In Guyana, support for the introduction of the Value-Added Tax in 2007 was canvassed not so much for its revenue gathering potential but that it repealed several taxes which had a cascading effect on prices. Nevertheless, in the very first year of its introduction in Guyana, VAT accounted to a whopping 26.8% of the tax revenue of Guyana, despite the promise by the then Administration that the tax would be revenue neutral…..

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