Introduction
The United Nations has released a comprehensive Guidance Paper Series on Value Added Tax (VAT) and Goods and Services Tax (GST) aimed at supporting developing countries in strengthening their indirect tax systems. This series, approved during the UN Committee of Experts on International Cooperation in Tax Matters’ Twenty‑Ninth Session in October 2024, was formally published in December 2025. It provides practical, structured guidance aligned with the UN’s mandate to bolster domestic resource mobilization and advance the Sustainable Development Goals (SDGs).
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Purpose and Context
VAT/GST is a central pillar of government revenue in developing countries, and the UN recognizes the importance of modern, well‑designed consumption tax systems in achieving fiscal sustainability and funding social protection programs. The guidance series responds to the need for concrete, implementable tools to help countries strengthen tax policy design, administration, compliance frameworks, and digital capabilities.
[financing….esa.un.org], [financing….esa.un.org]
The papers were prepared under the oversight of the UN Tax Committee’s Subcommittee on Indirect Taxes, whose experts represent diverse regions and tax systems. Their work emphasizes a multi‑stakeholder, multidisciplinary review process to ensure the guidance is globally relevant yet adaptable to country-specific circumstances.
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What the Guidance Paper Series Covers
The UN approved four foundational papers addressing key VAT/GST implementation challenges in developing countries. Summaries of the four papers—confirmed in both official documents and expert commentary—are provided below.
1. VAT/GST Fundamentals in Developing Countries
This paper provides a comprehensive introduction to VAT/GST design, administrative challenges, compliance gaps, and equity considerations affecting developing nations. It explains the functioning of consumption taxes, their economic role, and common implementation pitfalls.
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2. VAT/GST Refunds
This guidance explains why refund systems are essential to preserving the integrity of VAT as a tax on consumption rather than production. It covers:
- Refund mechanisms
- Administration safeguards
- Risks of fraud
- Strategies for ensuring timely and transparent refunds
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3. VAT/GST for Small and Medium Enterprises (SMEs)
The SME paper explores policies affecting small businesses, such as:
- Registration thresholds
- Exemptions
- Voluntary registration
- Sector‑specific thresholds
- Measures for reducing compliance burden while minimizing evasion
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4. Using New Technologies to Improve VAT/GST Compliance
This publication discusses emerging digital tools that can enhance tax administrations’ capacity, including:
- E‑invoicing
- Electronic reporting
- Data analytics
- Interoperable digital tax infrastructure
It emphasizes pragmatic digital transformation strategies tailored to each country’s administrative capacity.
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Additional Workstreams and Future Guidance
The UN Committee has identified several areas requiring further attention, including:
- VAT/GST in the digital economy
- Sector‑specific VAT/GST treatment (e.g., construction, tourism)
- Interaction between VAT/GST and other taxes
- VAT/GST treatment of government entities, charities, and donor‑funded projects
- Cross‑border VAT/GST dispute prevention and resolution
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Several workstream options are under consideration for expanding the guidance into a UN Handbook Series on VAT/GST, consolidating current and future publications.
[financing….esa.un.org], [vatupdate.com]
Why This Matters for Developing Countries
The new UN guidance series is significant because:
- VAT/GST accounts for a large share of government revenue in developing regions across Africa, Latin America, and Asia‑Pacific.
- Properly designed and administered VAT systems support fiscal stability and fund essential public services.
- The guidance helps countries build resilient tax infrastructures capable of supporting digitalization, enforcement, and anti‑evasion efforts.
[financing….esa.un.org], [vatupdate.com]
Primary Sources & Direct Links
United Nations Publications
- UN Guidance Paper Series on VAT/GST for Developing Countries (2025)
Download PDF [financing….esa.un.org] - UN Secretariat Note: Prior Work and Guidance Priorities on VAT/GST (2025)
Link [financing….esa.un.org] - UN Committee Secretariat Note on VAT/GST Guidance Gaps (Oct 2025)
Link [financing….esa.un.org] - Overview of VAT/GST in Developing Countries (Annex Paper)
Link [financing….esa.un.org]
Expert Commentary
- Alex Baulf – Summary of UN VAT/GST Guidance Release
https://www.linkedin.com/posts/alexbaulf_un-guidance-on-vat-gst-for-developing-countries-ugcPost-7422040022163341313-xdjB [linkedin.com]
Independent Reporting
- VATupdate – UN Committee Workstream Options for VAT/GST (2025)
Article [vatupdate.com]
