An introduction to VAT

Since the early 1990s VAT has been adopted by various countries as an efficient alternative revenue source. But there are those who are still holding out.

The world seems to have capitulated to the rise of indirect taxes and king of them all is Value Added Tax (VAT). Since the early 1990s VAT has been adopted by various countries as an efficient alternative revenue source. But there are those who are still holding out, the GCC is one of them, along with a number of Middle Eastern economies. The US also remains a stronghold of sales tax rather than VAT. However, there are constant suggestions that VAT may be introduced in both the US and the Middle East. But with President Obama denying any VAT agenda, it is probably safer to assume that countries in the Middle East will adopt it first.

How long these countries will hold out on introducing VAT is unclear, but one thing is certain, VAT is now firmly part of the tax landscape, and a very effective one too.