[雙語(yǔ)翻譯]增值稅外文翻譯--增值稅的類型埃塞俄比亞采用哪種增值稅方式?(英文)_第1頁(yè)
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1、Journal of Economics and Sustainable Development www.iiste.org ISSN 2222-1700 (Paper) ISSN 2222-2855

2、(Online) Vol.5, No.11, 2014 77 The Value-Added Tax Styles: Which is Adopted by Ethiopia? DasalegnMosissaJalata Department of Accounting and Finance, College of Business and Economics, Wollega University Post Box No: 39

3、5, Nekemte, Ethiopia. Email: dasseef@yahoo.com Abstract Currently many developed and developing countries has already adopted Value added tax (VAT) and others actively providing their intentions to introduce it. Am

4、ong the three VAT model existed across the globe, Ethiopia executed that of New Zealand’s model of goods and services tax (GST). The Ethiopian VAT replaces the out dated sales taxes that have operated for more than fou

5、r decades by January 1, 2003. The intention of the government to adopt VAT is that of raising large amount of revenue as the engine of development and to redistribute income and wealth among members of the community re

6、siding in a state, for fulfillment of the WTO agreement and to implement the IMF directions. Hence, the Ethiopian VAT is the consumption type of tax that has 15% standard rate without reduced, zero rate and some exempt

7、ions as implied by the rules and regulations. Though some problems were there in the areas of administrations, VAT crediting and exemptions, dealing with the technological advancement and innovations, the future aspect

8、s of the Ethiopia’s VAT taxing system are quite bright. Keywords: Value Added Tax, Ethiopia, Literature review, Policy implications 1. INTRODUCTION Currently Value Added Tax (henceforth VAT) is the most important

9、taxing system of the world.Whether the country is developed or not, it does not matter for VAT implementations as it is evidenced from different level of economies. As shown by Cnossen (1998), ‘‘the nearly universal in

10、troduction of the VAT should be considered the most important event in the evolution of tax structure in the last half of the twentieth century.’’While the origins of VAT was still never been decisively settled,it was

11、first introduced at a national level in France in1954 though, its original coverage was limited (James, 2011).The most recent scholarly literature written by Charlet&Butdens (2012), shows as more than 150 countries

12、 which becomes about 75% of the world has now been implementing VAT. Among the developed and largely industrialized countries however,USA is the one that hasn’tyet implemented the federal VAT system even though now has

13、 the trend toward it. According to James (2011), VAT as consumption tax was considered and spread globally since it appropriately matched to the revenue needs of states in an increasingly globalized economy. Even if t

14、his depends up on each country’s policy, recently some commentators of the tax system shows asVAT directly related to the country’s growth and development. Considering such issues, the Ethiopian government revisited it

15、s tax policy related to the revenue required to meet these expenditures which were aggravated than ever before. And hence, tax reform was undertaken in the 2002 and VAT becomes the outcomes of such tax reform in Ethiop

16、ia.Though, in Ethiopian tax history,the system of sales tax had served for more than four decades with insignificant means of income, theVAT replaces the outdated general sales tax that operated formally for ten years

17、before its abolitions by 2002. So VAT first implemented on January 1st2003 in accordance with the VAT proclamation No 285/2002. However the most important question is that which styles of VAT is adopted and which type

18、of VAT is implemented in Ethiopia? As there is no research done on such critical concept for further understanding of VAT in Ethiopia,this paper aims at providing the general concept on the types and styles of VAT ado

19、pted and implemented concentrating on the constitutions, proclamations, directives, regulations and other related literatures. To that extent, this paper will expand the knowledge on the limited literature accessible o

20、n such concepts. 2. REVIEW OF LITERATURE AND DISCUSSIONS 2.1. When and why VAT was adopted in the world? Before the emergence of VAT system, different countries of the world uses their own taxing system to generate r

21、evenue for the government. The latter half of twentieth century however comes up with the new agenda which are the transformations of turnover and sales tax system to VAT. And after the inceptions of VAT starting from

22、1950’s, the world economieswere largely integrated with each other. This can be reasoned forinstance as many of the industrialized countries enacted some rule that must be fulfilled regarding to VAT to join Organization

23、 for Economic Cooperation and Development. Among them however,United States remains one of the few Western industrializedcountries without a VAT and the only one without a VAT or a nationalsales tax(Reischauer, 1992).

24、In America non adoptions of VAT have different reasonsas explained by different authors. For instance, James (2011) shows as liberals criticized the perceived regressivity of a VAT and conservatives feared the Journal o

25、f Economics and Sustainable Development www.iiste.org ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online)

26、Vol.5, No.11, 2014 79 percentage of total taxation has grown by more than 70%, from 11.2% on average in 1985 to 19.2% in 2009. B. The New Zealand model of VAT style In New Zealand, VAT is referred to as goods and

27、services tax (GST) and it came into effect in 1986 (Yesegat, 2009). The New Zealand model of VAT applies the features that collect the VAT revenue using a single standard rate on the reasonably broad based goods and se

28、rvices.The introduction of GST in New Zealand was more successful than elsewhere and it is often mentioned as a model for other countries VAT or GST. Among the existed VAT models, the tax base of the New Zealand’s GST

29、 is commonly considered to be the broadest of any VAT and this makes New Zealand to be the model for many countries like Singapore and others (Ainsworth, 2006). C. The Japanese model of VAT style The Japanese govern

30、ment introduced VAT in 1989 after the elapse of 10 years for debate. The Japan’s consumption tax rate which is the flat rate of 5% without exemptions of goods and services from such tax is the lowest tax rate among the

31、 world especially when compared to the European and Northern American countries these who have multiple tax rates. However, currently Japan’s Prime Minister Abe Shinzō announced to raise the consumption tax from its cu

32、rrent rate of 5% to 8% which may be implemented by April 2014. In addition to that, the Japan governments have planned to raise the Japans Consumption tax rate from 8% to 10% by 2015 even if this may have some economic

33、 difficulties and merit too. The Japanese consumption tax is neutral as it neither encourages nor discourages choices among domestic or foreign purchases of goods for business inputs and corporate profits (Ainsworth, 2

34、006). The tax base of Japanese consumption tax has a base nearly as broad as the New Zealand’s GST base with the exceptions of the tax exemptions especially in the area of food. However, the Japanese tax base is more

35、complex than any of the VAT/GST model. D. So which is mostly recommended? The study of Bogetic& Hassan (1993), on the emerging conventional wisdom based largely on practice and numerous country case studies, sugg

36、ests that a single rate VAT (with the rate between 10 and 20 percent), with very few exemptions and, therefore, a broad based is superior to a VAT with multiple rates and many exemptions which reduces its base and comp

37、licate administration system. As compared to other models of VAT system, New Zealand’s VAT is more importantly favored to generate large amount of revenue and it reduces the distortions emerged on the overall economy o

38、f one country. Hence, among the three major types of VAT in existence across the world, New Zealand’s VAT model comes closest to approaching the ideal or good VAT system (James, 2011). 2.3. When and why VAT was ado

39、pted in Ethiopia? Two decades ago, the Ethiopian government decides to collect tax revenue from the goods and services sold and purchased including both import and export state of affairs. These ideal discussions have

40、 been implemented by 1993 with the Sales and Excise Tax Proclamation No 68/1993. The sales taxes are indirect tax systems of consumption taxes and until its date of abolishment, it passes through several amendments. Ho

41、wever, this strategy of the taxing system never aggravated revenue boosting objectives of the government. This may be due to the applications of tax on tax or what we call tax cascadity concept of sales tax. In additio

42、n to that, sales tax increases the price of goods and services throughout the periods because it uses the value of goods to be sold on the final purchaser of goods and services rather than its value additions as tax ba

43、se. Hence, even though the sales tax operated for more than four decades in the history of Ethiopian taxing system, its functionality has stopped by only one decade due to the occurrence of tax reform which leads to em

44、ergence of VAT in 2003. Not only the above reasons of revenue generating agenda that Ethiopia replaced her out dated sales tax by VAT but it is for fulfillment of the forthcoming trade agreements with world trade org

45、anizations (WTO) and to meet the directions given by the International monetary fund (IMF). However, this transformation has resulted in some resistance in the economy at the starting period, yet implemented with a hig

46、h level of harmony as of the todays data. So after Ethiopia incepts VAT, the revenue generated from tax increased and this increased revenue for the government can be contributed towards social, political and economic

47、agendas and hence, it will enhance the living standards of individual citizens as they may benefit from what government provides for them. 2.4. Which styles of VAT is adopted by Ethiopia? Different literatures were

48、 reviewed and compared with our country’s constitutions, proclamations, directives, regulations and other related published and unpublished literatures and reports regarding to VAT. Due to the reason that VAT has multi

49、dimensional advantages to the country, many states to which Ethiopia is not an exception adopted it. This can be assumed as the government and tax revenue is hand and glove for each other. Hence, according to the VAT p

50、roclamation No 285/2002, Ethiopia adopted and implemented VAT by January 1st 2003 with the single standard rate of 15%, zero rate and some exemptions treated under the law and regulations. As discussed above, we have t

51、hree most important models regarding to VAT: European, Japanese and New Zealand styles. Among these, even though most jurisdictions of the state across the world adopted that of the European model of VAT, many commenta

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