THE REDUCED VAT RATE FOR ELECTRONIC PAYMENTS

Creating transformation through the innovation

INNOVATION

Application of reduced VAT tax rate for the electronic payments.
Ref. SP-RTEP_3XI20

PROBLEM

In today’s global environment the cash payments have brought up intensified undesirable effects on the monetary systems, like the tax evasion, money laundering, corruption and bribery. Although the existing monetary international arrangements support electronic transfers, the cash payment still leaves space for such fraud practices, what represents a severe obstacle in transparent and desirable financial practices.

SOLUTION

Variation of the tax system which would introduce a significantly reduced VAT rate, and additionally emphasised the standard VAT rate, would stimulate the electronic payment on account of cash payment.

MODUS

The reduced VAT rate for electronic payments within the existing Tax system must be induced institutionally through the parliament voting.

DIFFERENCES TO EXISTING PRACTICE

Existing practice does not differentiate the cash and electronic payments.

FOLLOWING MEASURES

Scientific research on economic impact should be performed. The result would give a precise projection of the measures and ultimate benefits of the innovation.

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