Finance and Credit

VAT reform: The transition to a tax on goods and services (GST) and changes in the conceptual apparatus

Vol. 24, Iss. 6, JUNE 2018

Received: 7 May 2018

Received in revised form: 22 May 2018

Accepted: 5 June 2018

Available online: 30 June 2018

Subject Heading: FISCAL SYSTEM

JEL Classification: H20, H25, H30

Pages: 1432—1446

Davletshin T.G. OOO Burovye i Neftepromyslovye Nasosy (Oil-rig and oilfield pumps), Kazan, Republic of Tatarstan, Russian Federation

ORCID id: not available

Importance The article studies problems of transition from VAT to GST and related changes in the imperfect conceptual apparatus. It also considers common errors in the interpretation of VAT and their resolution during the transition to GST.
Objectives The author analyses disadvantages of the VAT existing legislation and methods of their elimination in the transition to GST.
Methods The study draws on general scientific approaches and methods.
Results The author states the necessity of renaming the object in accordance with international practices – “tax on goods and services”.
Conclusions and Relevance Despite the name, VAT is a tax on final consumption and needs renaming. The transition from VAT to GST requires considerable changes in the conceptual apparatus. It eliminates the basic contradiction of Chapter 21 of the Internal Revenue Code and defines the taxation object. This leads to creation of a logical and coherent document. Economic payer of the GST is the end user. Entrepreneurs promoting the goods (works, services) become tax agents. The role of invoices shall be allocation of the consumption tax. The Purchaser shall pay the GST as a tax or the amount of tax deduction.

Keywords: value-added tax, goods/services tax, final consumption tax, tax harmonization, indirect tax


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Vol. 24, Iss. 6
June 2018