The case for VAT in Kenya is:
- Easy to administer since the seller of good or service becomes the collection agent.
- It allows for the canon of productivity since more goods and services can be subject to VAT
- to increase revenue to the government.
- It is difficult to evade since it is charged on selling price.
- It does not have a cascading effect i.e no tax is charged on tax.
The case against VAT
- It is complicated for most traders and requires many records to be maintained.
- If charged on basic commodities, hence it falls heavily on the poor and may not be equitable.
- Not convenient for most taxpayers e.g it has to be paid by 20th day of the following month
- even where the trader made a credit sale and has not received cash.
- It could have inflationary effects since it will lead to increase in commodity prices.