http://worldcat.org/entity/work/id/473553776

VIVAT, CVAT and all that new forms of value-added tax for federal systems

At the heart of the remarkable spread of the VAT around the world there is a great irony. One of the main appeals of the tax has been the elegance with which it enables tax to be removed from commodities entering international trade. In this way the VAT has done much to foster closer economic integration. As that integration proceeds, however, and trading partners seek to establish a more complete economic union with one another, so the difficulties that arise when VAT powers are allocated to the members of a federation-elaborated on below- become more evident. That is, while VAT is widely heralded as a good tax for countries trading with one another it is also generally regarded as a bad tax to give to lower-level jurisdictions in a federation. This is most evidently the case in the European Union (EU), of course, where the development of the VAT has been the central tax accomplishment of the member states but has now reached an impasse, with those member states unable to agree on how to design a VAT for the single market that they seek to deepen. The EU experience is merely one instance of a more general question: Can the VAT be run in a federal system other than as a federal tax?

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