ABSTRACT
The merits or otherwise of the value-added tax (VAT) are worth considering but they are posed in urgent form by British approaches to join the European Common Market. Before the tax changes that came into force on January 1st, 1968, between a quarter and a fifth of all tax revenue in France came from turnover and sales taxes, of which VAT provided the bulk. The tax is charged comprehensively on all goods, subject only to defined exceptions. Thus, it covers consumer goods, many foodstuffs, industrial materials and intermediate products. Purchase tax is also allowed to be rebated on exports and charged on imports. The significance of the change to a VAT would lie in what other taxes were reduced or abolished. Adopting the position that a VAT is a tax on consumers collected by companies, an equity problem arises. It is concerned with the regressive nature of indirect tax. VAT could raise large sums in revenue.
