V1.209 Adoption by the UK

The decision to introduce value added tax into the United Kingdom resulted from a combination of economic and political considerations. As the then Government's green paper1 pointed out, the existing system of indirect taxation (comprising purchase tax and selective employment tax) had been allowed to become “too complex and discriminatory”, and it was intended to replace this system with a more broadly based structure which, by discriminating less between different types of goods and services, would reduce the distortion of consumer choice.

It was accepted that purchase tax was efficient, but “in practice it would not

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