No. of Recommendations: 5
The benefit (to the government) is that the VAT is invisible to the end purchaser, so they don't really realize that they are paying a HUGE tax.
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In Canada the VAT (called GST) is added on after the purchase price - not hidden.
We pay huge taxes to the government because they spend huge amounts of money, because that is what we elect them to do. I would be the first to applaud if governments decided that many of these often wasteful government expenses were eliminated, but as long as we have democracies and voters like to get things from the government, we need to pay for them somehow.
Here in Canada, the GST is indeed added on after the purchase price, and, in many provinces, an additional provincial tax is tacked on as well. This means the $50 item ends up costing something like $57.49 (after adding 5% for federal tax and 9.5% here in Quebec). I much prefer the European system where you pay round numbers for things, with the tax 'hidden' inside the ticket price, like all the other costs that are hidden inside that price.
If the idea is that those extra lines on the receipt are a useful political reminder of the fact that there is a sales tax, I beg to differ - Europeans are smart enough to know that sales taxes exist. I would prefer their system where what you see is what you pay.
dtb
