What are the disadvantages of VAT?

[jatin]

I’ve been reading about Value Added Tax (VAT), and while it’s common in many countries, I’m curious about the downsides. Some say it can be regressive and hit lower-income groups harder, while others mention compliance costs for businesses. What do you think are the main disadvantages of VAT?

 

[brook]

VAT has the ability to hike up prices, strain small businesses with complicated regulations and affect low-income groups more as it is retrogressive. The increased filing and auditing impose additional expense. Businesses are required to have a high level of records and this may decrease efficiency and raise administration.

 

[ankita]

Due to its retrogressive nature, VAT has the potential to increase prices, burden small firms with onerous rules, and disproportionately impact low-income populations. Additional costs are incurred due to the increased filing and auditing. Companies must keep a lot of documents, which could increase administration and reduce efficiency.

 

[denjoshep]

Because of its retrogressive character, VAT has the ability to raise prices, burden small businesses with onerous regulations, and disproportionately affect low-income populations. Increased filing and audits result in more costs. Companies must store a large number of documents, which may raise administration and hinder efficiency.

 

[Samuel]

VAT has the potential to increase costs, burden small enterprises with burdensome rules, and disproportionately impact low-income populations due to its retrogressive nature. Costs rise as a result of increased filing and audits. Businesses have to keep a lot of documents, which can increase paperwork and reduce productivity.