The value added Tax in Tanzania: Lessons from experience of other developing countries
Christine M. S. Shekidele (The Institute of Finance Management, Lecturer in Taxation and Head of the Tax Management Department)
Download Article | Published On 01/12/1996

Abstract

Most of developed and developing countries have adopted VAT with the main object of base broadening and increasing revenue. The most popular is consumption type VAT levied on the basis of destination principle. Our analysis of the experience of some developing countries has shown that a VAT that extends to retail level is preferable to pre-retail VAT. In order to avoid production and consumer distortion VAT should be impost-don both goods and services at a single (uniform) rate. However, the application of zero-rate on essential goods is inevitable in order to help poor households. To create progressively and increase revenue we suggest that an excise system be applied on luxury and traditional excise goods. The expenence of other developing countries provides us with recommended lessons to Tanzania.

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