VAT Exemptions

"The theoretical economic neutrality of thevalue-added tax (VAT), its comparatively lowvulnerability to fraud, and its proven ability toraise signifi cant revenues have led to its ultimateadoption in some form or another by mostcountries and by many hundreds of subnationaladministrations worldwide. However, nowhereis VAT found without exemptions, a featurethat undermines its fundamental logic andcompromises its effi ciency and neutrality."