Indirect Tax News, July 2016

July 2016

Over recent years, and particularly during the economic downturn, governments across the globe have opted to increase indirect tax rates — as opposed to personal tax rates — to help shore up deficits in their annual budgets, and it is my expectation that indirect taxes will become the main focus for increasing tax revenues in quite a number of countries going forward.

The main reason behind this approach is that, whereas personal tax liabilities are based on individual’s earnings and it is mandatory to pay any taxes based on personal earnings, individuals potentially have an option as to what they spend their money on, so they could potentially lower their tax burden if they focus personal expenditure on goods and services which are not liable to VAT and GST.