Tightly controlled and strictly supervised tax

The administrative, accounting and other
compliance requirements and obligations on businesses are intense and the
consequences of any failure to adhere to all the detailed rules and regulations,
including matters which might appear to be mere formalities are often severe.
Indeed, a frequent result is that otherwise VAT-free (“zero-rated”) sales become
fully taxable with no possibility of passing the burden on to the customer, or
that otherwise perfectly acceptable input tax becomes non-deductible with no
recourse to the original supplier.

Consequently, attempts to reduce the not
inconsiderable VAT accounting and other compliance costs by taking “short-
cuts” frequently prove to be false economies.