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Thread: Income Tax and Value Added Tax

  1. #11
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    Default Re: Income Tax and Value Added Tax

    One, abundant information on the tax will work is necessary. Second, what benefit we will receive from that contribution. Giving is ok, but we should get something in return too.

  2. #12
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    Default Re: Income Tax and Value Added Tax

    When VAT was introduced in my home country, there was a lot of concern over impact on sales and financial burden on the sellers. However, a person who buys things is the person why pays the VAT. When he buys, VAT is included in the price. The seller than pays back the VAT collection to the revenue collection department. IN the beginning VAT had an impact on sales, but years later people seem comfortable with it.

  3. #13
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    Default Re: Income Tax and Value Added Tax

    Quote Originally Posted by pwarbi View Post
    If VAT hadn't been introduced over here in the UK, then the government would have found a different way of doing things so like others have said, it was inevitable that we would have had to pay some sort of tax so like it or not, it's become just a fact of life.
    We already had Purchase Tax, which VAT replaced. Purchase Tax had some very odd loopholes, like the kit car industry: cars had a high levy, but car parts didn't. So customers bought all the parts for a car and built it. In practice it just created a cottage industry with some garages taking cash to build the kits for people.

    I think the problem with VAT is that it is virtually impossible to lower the VAT rate. If they could start balancing the rates to stimulate certain industries it would be seen as less of a problem.

  4. #14
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    Default Re: Income Tax and Value Added Tax

    In our country we don't have to pay income tax for the first 300,000 rupees we make in a year (the sum is more if you are married or have children). If you earn more than that, you will have to pay income tax. Income tax is the tax that you pay on your earnings.
    value added tax is the tax that you pay for the things you buy. The price of every commodities comes with VAT added. You as a consumer will have to pay VAT for everything you buy.

  5. #15
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    Default Re: Income Tax and Value Added Tax

    Just yesterday GST has come into effect in my country and when we compared the before and after tax values, after the introduction of GST the tax values seems like increased and for some products, they have hiked it so much that people are complaining about buying them. We know that government uses our tax money to serve us but I don't think we are served in a legit way. It is the people who suffer whenever the government does some changes in the name of welfare of the people.

  6. #16
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    Default Re: Income Tax and Value Added Tax

    When VAT was introduced in my home country, business owners opposed the idea. They even went on a strike. However, the government was determined to implement VAT. When VAT was finally implemented, the business owners were mum because it was the customers who had to pay the VAT, not the business owners. When customers bought an item, the price included VAT. Initially, 10 percent VAT was implemented, now it is 13 percent.

  7. #17
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    Default Re: Income Tax and Value Added Tax

    We have been brought under VAT recently in India with different rates on different categories but in most cases 18% on most. In my present location in Australia I am used to it and that is not a problem at 10% on most items. I have not yet paid VAT in India as it was introduced recently and still being debated largely by opposition parties. I believe we really needed it in India as we had different rates of taxes in different states and therefore paying different prices for the same items. However, paying 18% or more on other categories is a bit of a harsh decision which will raise prices of most items.

  8. #18
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    Default Re: Income Tax and Value Added Tax

    Our Senate is currently reviewing important provisions of the proposed tax reform law. While it ostensibly provides relief (not really much if you know how to do taxes) to lower income earners (minimum wage earners are exempt from income tax), the proposed tax reform law is nothing but a measure to for the government collect more money. There are at least two provisions that will hurt low income earners who are already struggling. One is the imposition of 12% VAT on socialized and economic housing as well as on low cost real estate rentals. Another is the imposition of excise tax on fuel products which is already subject to VAT.

    There is already a backlog in housing and the passing of the law will mean that housing will even become more out-of-reach of ordinary people. That is huge! House and lot packages are already beyond the reach of many people without the VAT being added. Real estate developers have stated that they will slow down construction leading to loss of jobs for many people.

    Fuel prices are already rising because of the weak exchange rate and if they add an excise tax on top of the VAT, it will not hurt the rich, but the poor who rely on public transportation. Public transport companies will have no option but to raise their fare to cope with fuel price increases.

    In the future, people will just choose to squat and seize houses (like one group did) instead of working hard to buy their own. Many recipients of support vouchers from the government are in a much better financial position than those who are working hard and barely earning minimum wage. Squatters get low cost housing and allowance, the minimum wage earners don't. Now, they have to swallow VAT if they want to buy a home they can call their own.

  9. #19
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    Default Re: Income Tax and Value Added Tax

    Well everyone certainly loves taxes, but they are an important tool that we should all probably understand more. I myself do not really know all that much about the different levels of taxation, which makes me a little worried now and maybe I should go do a lttle homework myself.

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