i. Many statutory records i.e. tax invoice, cash books, debit notes are to be maintained which is a complicated process.
ii. Most tax payers are semi-illiterate and they do not follow the required procedures.
iii. Enforcements of VAT require high caliber staff for cautionary audit.
iv. High tax avoidance and evasion where invoicing is not strictly enforced.
v. Where there is no price control traders will increase prices unreasonably, citing VAT as a reason.
vi. Where some goods and services are not vatable VAT is discriminatory.
vii. Proper accounting for VAT requires, proper functioning ETR machine, but in some case they can fail.
viii. VAT is a kind of a progressive tax since it‘s charged at a flat rate irrespective of the ability to pay
Wilfykil answered the question on February 15, 2019 at 09:09
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