How does VAT work?
Under the VAT system, both the producers and consumers will benefit. The effective tax rate for most goods will be reduced and the base will be broadened to include most services. Neither goods nor services will be taxed twice as businesses registered for VAT purposes will be able to collect the tax and take a credit for taxes paid on their inputs/purchases. The difference will be paid to the Government. It is important to note that the business person does not pay over to the GRA all the VAT collected from consumers. The registered business person will deducts all the tax that he/she pays on purchases for the business from the tax collected from consumers and remits the difference to GRA, if there is a balance. In cases where the VAT paid by the business person on purchases for the business is greater than the VAT collected on sales to consumers, the business person will get a refund of the excess amount. This will allow Government to collect portions of the tax at different stages. W
