Front Matter Page

Fiscal Affairs Department

Contents

  • Abstract

  • Acronyms

  • I. Introduction

  • II. Tools to Encourage the Use of Invoices or Payment Systems

  • A. The VAT Paid on Personal Consumption Creditable Against the PIT or Deductible Against Taxable Income

  • B. The Reduction of the VAT Rate for Using Electronic Means of Payments

  • C. Lottery Programs

  • III. Tools to Reduce the Impact of the VAT on Low-Income Individuals

  • A. Tax Credit to Low Income Taxpayers

  • B. Smart Cards to Refund the VAT to Low Income Individuals

  • C. The VAT Paid Creditable to all Taxpayers with Limits

  • IV. Conclusions and Policy Recommendations

  • References

  • Box

  • 1. The VAT Impact on Low Income Individuals in LICs and EMEs

  • Figures

  • 1. Bolivia, PIT (VCR) Revenue

  • 2. VAT Revenue and VAT Non-Compliance (2008–2018)

  • 3. Imports and VAT Revenue (2008–2018)

  • Tables

  • 1. Countries with VAT as a Credit or Deduction to the PIT

  • 2. PIT and Tax Revenue by Group of Countries

  • 3. Ecuador – The Revenue and Equity Impacts of Eliminating the PIT deduction allowed for Personal Expenses

  • 4. Ownership of Financial Accounts and Digital Transactions by Income Group and Digital Transactions by Income Group and Gender (2017)

  • 5. Portugal: Effect of the VAT Credit against the PIT

  • Appendices

  • I. Measuring the Impact of the 2012 PIT Reform on VAT Revenue in Guatemala an Empirical Approach

  • II. The Impact on Income Distribution of Exemptions and Reduced Rates of Exemptions and Reduced Rates of Consumption Taxes

Acronyms

CAD

Canadian Dollars

CIT

Corporate Income Tax

EMEs

Emerging Markets and Developing Economies

ETR

Effective Tax Rate

FAD

Fiscal Affairs Department

GDP

Gross Domestic Pr o duct

GST

General Sales Tax

HST

Harmonized Sales Tax

LICs

Low Income Countries

PIT

Personal Income Tax

URU

Uruguay Peso

VAT

Value-Added Tax

VCR

VAT Complementary Regime

Encouraging Formal Invoicing and Reducing the VAT Impact on Low-Income individuals
Author: Mr. Ricardo Fenochietto