Taxtion Profect Literature review Example | Topics and Well Written Essays - 2250 words

Taxtion Profect - Literature look backward ExampleHowever, the impact of tax travels to the end consumer in a ad valorem tax scheme frequently manage former(a) taxation systems since goods and services providers tend to move the taxed amount to the end consumers final wrong receipt (Ebrill et al., 2001). vat Implementation in the United Kingdom bathtub is not a forward-looking concept to the United Kingdom (UK) and was in place before the UK signed up for the European Union. The sign implementation of VAT in the UK dates back to 1973 when it was introduced by the national government as an entry shape to join the European Union (EU) (Warren, 1993) (IFS, 2009). VAT is not levied universally on all goods and services in the UK. Instead, VAT is applicable to certain goods and services at varying rate in the UK. Directives concerning the amount of VAT and its application to goods and services ar provided both by the UK government and certain EU rules and guidelines. Moreover, V AT rates tend to vary for certain goods imported from outside the EU (HMRC, 2013). VAT Rates Her Majestys Revenue and Customs (HMRC) provides for three different VAT rates that are classified as (HMRC, 2013) received 20% Reduced 5% Zero 0% Standard VAT rates apply to more or less goods and services consumed in the UK while reduced rates apply to certain items much(prenominal) as fuels, susceptibility savers, power items etc. On the other hand, zero rates apply to certain other items such as certain food items, public transportation, books, childrens clothes etc. (HMRC, 2013). It must be unbroken in mind that zero rate VAT items are differentiated from items disengageed from VAT. Any items that are exempt from VAT cannot have VAT based taxed applied to them under the law such as on insurance, charitable fundraising, life saving services etc. In contrast, zero rate VAT items are taxable but are charged for at 0%. The retailer may lodge a reclaim with the HRMC for zero rate VAT i tems but not for VAT exempt items (HMRC, 2013). In addition, VAT law provided by the EU mandates that the minimum standard rate for EU members has to be 15%. element states are also allowed to apply a maximum of two different reduced rates that should be at least 5% on certain goods (European Commission, 2006). Moreover, any changes in VAT especially changes concerning change magnitude VAT rates must be approved by the EU alone (Victor, 2010). regional Comparisons VAT is applicable throughout the EU and certain member states exhibit exceptionally high VAT rates. Regional similitudes of VAT rates are presented in the table provided below. Table 1 - VAT regional comparison sourced from (Victor, 2010) Country VAT Rate (%) UK 20 Denmark 25 Hungary 25 Sweden 25 Iceland 25.5 Criticisms against VAT VAT is serene at each value addition stage in the provision of goods and services so ideally VATs burden should be borne by these stages and their stewards. However, practically VAT banks on the end consumer much like other forms of taxation. This tends to make VAT just as cumbersome for the average consumer as other forms of taxation. In addition, it has been argued that VAT is essentially a regressive form of taxation though proponents of VAT fancy it as progressive. The graph presented below presents how different taxes on consumers in the UK tend to vary by the income quartiles. judge 1 - Tax composiitons and their differences according to income groups in the UK sourced from (Murphy, 2010) Tax collection through VAT is generally cast down than expected