IDEAS home Printed from https://ideas.repec.org/p/imf/imfhtn/2021-004.html
   My bibliography  Save this paper

How to Manage Value-Added Tax Refunds

Author

Listed:
  • Mario Pessoa
  • Andrew Okello
  • Artur Swistak
  • Muyangwa Muyangwa
  • Virginia Alonso-Albarran
  • Vincent de Paul Koukpaizan

Abstract

The value-added tax (VAT) has the potential to generate significant government revenue. Despite its intrinsic self-enforcement capacity, many tax administrations find it challenging to refund excess input credits, which is critical to a well-functioning VAT system. Improperly functioning VAT refund practices can have profound implications for fiscal policy and management, including inaccurate deficit measurement, spending overruns, poor budget credibility, impaired treasury operations, and arrears accumulation.This note addresses the following issues: (1) What are VAT refunds and why should they be managed properly? (2) What practices should be put in place (in tax policy, tax administration, budget and treasury management, debt, and fiscal statistics) to help manage key aspects of VAT refunds? For a refund mechanism to be credible, the tax administration must ensure that it is equipped with the strategies, processes, and abilities needed to identify VAT refund fraud. It must also be prepared to act quickly to combat such fraud/schemes.

Suggested Citation

  • Mario Pessoa & Andrew Okello & Artur Swistak & Muyangwa Muyangwa & Virginia Alonso-Albarran & Vincent de Paul Koukpaizan, 2021. "How to Manage Value-Added Tax Refunds," IMF Fiscal Affairs Department 2021/004, International Monetary Fund.
    • Handle: RePEc:imf:imfhtn:2021/004
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=50357
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    value-added tax; refunds; VAT; management framework; VAT refund; Georgia revenue service; VAT system; Tax refunds; Tax administration core functions; Credit; Income; Global; Africa; Currencies;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfhtn:2021/004. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.