The conceptual shortcomings of the vat legislation and ways to address them

Abstract

The article analyzes the disadvantages of the choice of elements in the legal design of VAT and demonstrates the impossibility of relieving them by any administrative improvements. The aim of the study is to justify the choice of the object of VAT taxation, determination of the tax base: VAT, profit, income tax and base insurance premiums. The elimination of these shortcomings requires that you define added value as the object of taxation and eliminate tax legal relationships between the parties. We also establish the interrelation of value added and the base of the main taxes: VAT, income, individual income and social insurance contributions. Effective distribution of value added between wage Fund and profit will automatically balance the purchasing power and supply of goods/services. A method of determining GDP by the amount of VAT paid to the budget is proposed. Refs 4. Fig. 1.