| dc.description.abstract | The current administration has made efforts to improve the tax system to enhance the efficiency of tax collection and bolster economic competitiveness. In this context, it has presented four executive Bills to the National Assembly. However, one of the key provisions of the bills, a derivation-based VAT distribution model, has sparked controversy due to its perceived disproportionate effects on some states. While a derivation-based model could promote healthy competitiveness among states, several factors need to be carefully considered to ensure fair application and implementation. Challenges arise in assigning and sharing VAT from imports, VAT on international services and VAT for services rendered nationwide, all of which make it difficult to remit VAT directly to specific states. Challenges arise in assigning and sharing VAT from imports, VAT on international services, and VAT for services rendered nationwide, all of which make it difficult to remit VAT directly to specific states. Additionally, there is a need to address the allocation of VAT collected by corporations that provide services nationwide but remit VAT in the states where their headquarters are located. Further consideration should be given to states that produce VAT-exempted goods, such as agricultural products, to ensure equity in the distribution of VAT revenues. As it reviews the proposed tax bills, the National Assembly may take these issues into account. Engaging with the executive branch could also provide clarification on the remittance of VAT from imports, international services, and companies whose goods and services are widely consumed across the country. | en_US |
