The nation of America continues using its version of Sales Tax system in taxing services and goods but the chances of usa VAT being implemented increases with deficit levels rising beyond uncomfortable levels. Most of Europe together with several developed and developing countries have adopted vat for taxing goods and services, and also the US is seriously thinking of embracing this method to boost vital tax http://vatvalidation.com revenues.
For years, the US has stuck to its version of Sales Tax or Retail Tax in which the end user may be the only one afflicted by tax on goods and services. The tax rates in America are usually quite low and usually peak at around 13% while vat or value added tax rates in some countries are up to 25%. In addition, while sales tax is used just once, vat is used each time goods or services change hands, although there are provisions for vat refunds within the system. However, with the yearly US budget deficit running clearly more than a trillion dollars, and rising with each passing year, advocates of vat are getting aggressive on implementing vat in the United States in the long term.
However, politicians fear that implementing usa vat could raise prices and pose a problem to the already-burdened common man, and as a result lead to reduced consumption of goods and services. Thus, not many in the present administration are willing to pursue the idea of bringing vat to the country. Most people agree, though that vat does promise to raise revenues while plugging tax leaks to a degree.
In case the US does implement vat in the same way it's been carried out the United Kingdom or other European countries then traders will need to make an application for vat registration after they cross over the vat threshold figure. Each vat registered trader will then need to make a vat invoice that clearly mentions the vat number and also the applicable vat rates on goods and services. In addition, traders will also need to file regular vat returns and can reclaim vat refunds for vat amounts already paid. Although the system sounds complex, in reality, it is extremely easy to understand once traders get used to it, whilst the US government reaps higher tax revenues with each passing transaction.
It might take several years for usa vat to ultimately be implemented in the United States as politicians and economists make an effort to explore other avenues to seal the massive deficit. This can include lowering expenses or levying additional taxes on certain goods or certain elements of society. However, more and more people seem to be prepared to take the very idea of introducing vat in the US after looking at other countries which have managed to boost their tax revenues resulting from vat. Maybe, only time and a terrible deficit could usher in vat into the USA within the next several years.
While most other countries including Europe have shifted to vat in a bid to recover more taxes on services and goods, the US has remained loyal to its very own version of Sales Tax. However, growing deficit plus an inability to control expenses could soon see usa vat being ushered into the country, particularly if the powers-to-be choose to take a concrete step in that direction.
