The United States of America has continued with its version of Sales Tax system in taxing goods and services however 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 now utilize vat for taxing services and goods, and also the US is seriously considering embracing this process to raise vital tax https://vatvalidation.com revenues.
For years, America has stuck to its version of Sales Tax or Retail Tax in which the consumer is the only one subjected to tax on services and goods. The tax rates in the US are also very low and usually peak at around 13% while vat or value added tax rates in many countries are as high as 25%. In addition, while sales tax is used only 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 becoming aggressive on implementing vat in the country in the coming years.
On the other hand, politicians fear that implementing usa vat could raise prices and pose a challenge to the already-burdened common man, and in turn cause reduced usage of goods and services. Thus, not many in the present administration are prepared to pursue the idea of bringing vat to the country. Most people agree, though that vat does promise to increase revenues while plugging tax leaks to some degree.
If the US does implement vat in the same way it’s been carried out the UK or any other European countries then traders will need to apply for vat registration once they go over the vat threshold figure. Each vat registered trader will then need to make a vat invoice that clearly mentions the vat number and the applicable vat rates on services and goods. In addition, traders will also need to file regular vat returns and can claim back vat refunds for vat amounts already paid. Although the system sounds complex, in reality, it is extremely simple to follow once traders get the hang of it, even as 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 country as politicians and economists try 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 appear to be open to the very idea of introducing vat into the US after considering other countries which have managed to boost their tax revenues resulting from vat. Maybe, only time and a terrible deficit could usher in vat in to the USA over the following several years.
While most other countries including Europe have moved to vat in a bid to collect more taxes on goods and services, the USA 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 to the country, especially if the powers-to-be decide to take a concrete step in that direction.