As the price of fuel increases across the world and inflation surges in many countries, tax authorities are responding by leveraging VAT to minimise the economic damage.
Here’s a quick roundup of 15 tax snippets we’ve spotted so far this month:
Tanzania could soon become the latest country to adopt a digital services tax, with a proposal published to introduce a 2% levy on digital giants operating in the country.
India is reportedly set to reduce VAT on lithium ion batteries used in the production of electric vehicles from 18% to 5%.
The interest rate on late VAT payments has been increased again. The standard rate now stands at 15% (up from 13.5%), while the reduced rate is 7.5% and the increased rate is 22.5%.
A series of measures have been proposed to combat rising prices, including a reduced VAT rate of 0% on bread, 9% on heating supplies, electricity and natural gas. This would be offset by an increase in excise duty on products including cigarettes.
The province of Sindh is set to grant major tax relief to the IT industry by reducing the rate of sales tax on software, IT goods and call centres from 13% to 3%. It will also create a new five-year plan for the IT industry.
6) South Africa
A domestic reverse charge mechanism is to be introduced for vendors acquiring precious, valuable metals, such as gold, gold bars and jewellery.
The implementation of VAT at a rate of 15% in Suriname has been delayed until January 2023.
The Finance Minister of Bhutan has suggested the implementation of GST in the nation should be deferred for two years due to the current economic situation.
Tax on consumer loans has been doubled to 10% amid a surging inflation rate.
France has confirmed a 0.46% tax is applicable to online platforms that provide motorbike delivery services.
Finnish authorities are considering a cut to VAT rates on items including food and petrol following fears the country could head into a recession.
12) Costa Rica
A 1% VAT on electric cars will be introduced in 2023; and the rate will increase by a further 1% each year until a final rate of 13% is reached.
The reduced VAT rate of 9% for the tourism industry has been extended until the end of September 2022. It will not return to its typical level of 22% until at least 1st October.
14) Sri Lanka
The country’s standard VAT rate has been increased from 8% to 12%.
A new notice has been issued declaring that a 0% VAT rate has been applied to sunflower oil and flour, while there will also be a reduced rate for heating pellets.