ACCA and EY look at the evolution of VAT and current trends of indirect taxes across South Asia and UAE including Bangladesh, India, Pakistan and Sri Lanka in this joint report.
Tax is an instrument used to generate revenue and regulate national economies, it can be broadly divided into two categories: direct and indirect.
In many developing countries the contribution of VAT - an indirect tax - in total tax collections is increasing over time. This can be owing to an increase in unemployment or low per capita income as well as to innate features of VAT that make it less prone to tax evasion than income taxes, which are easier to evade/avoid.
Given the importance of VAT, this study discusses its features and the problems commonly faced by South Asian countries. Further, we look at the United Arab Emirates (UAE) which is in the process of introducing VAT and may benefit from the developments made in the VAT systems of various other countries.