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Licensed Unlicensed Requires Authentication Published by De Gruyter December 27, 2010

Recent Russian Debate on Moving from VAT to Sales Taxes and Its Global Implications

John Whalley and Vera Kononova

We discuss recent policy debate in Russia on moving from the present value added tax to a sales tax structure covering households, government and exports. We describe and document the debate, discussing in detail what the perceived Russian problems with the VAT are. We suggest that many of the difficulties reflect the multi staging in the credit-invoice mechanism in the VAT, rather than the VAT per se. We discuss the possible use of the subtraction and addition methods in the VAT as an alternative to the sales tax proposed. We also report estimates of possible changes in effective tax rates across sectors if the sales tax were enacted.

Published Online: 2010-12-27

©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston

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