- VAT has been a key component of consumption taxation in over 160 countries.
- Technological advances are challenging VAT’s dominance.
- VAT implementation involves high compliance costs, especially for SMEs.
- Digital payments, electronic invoicing, AI, and blockchain enable real-time tax collection.
- Central Bank Digital Currencies could reduce tax evasion by limiting cash transactions.
- Split payment sales tax automatically separates tax from payments, transferring it to tax authorities.
- Italy and the UK are exploring split payment systems.
- The European Commission is studying split payment to combat VAT fraud.
- Latin America is developing infrastructure for new tax collection models.
- Brazil’s tax reform includes split payment within a new VAT regime.
Source: ciat.org
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
