What Countries Use Value Added Tax?

A person interested in finance, business, or international relations may wonder, “What countries use value added tax?” This is important knowledge because it affects the costs of goods to the consumer. Awareness of which countries use it could help a person make an informed decision about their purchases.

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Asia, Australia and Oceania

Australia has a goods and services tax of 10 percent. For Oceania, Papua New Guinea also has a goods and services tax of 10 percent. Samoa has the highest rate of value added taxes in Oceania, with a rate of 18.91 percent. Nauru has the lowest rate for value added taxes, with an average rate of 1.72 percent on goods. In Asia, Azerbaijan has a rate of 18 percent for value added taxes. In Cambodia, the rate is 10 percent. The highest rate is in Macao SAR, China, which has a 27.08 percent taxation. The rates in China range from 6 to 13 percent, depending on the province and type of goods. The lowest rate for Asia is United Arab Emirates, with a taxation rate of 0.06 percent.

Africa

Many countries in Africa do not use this type of a tax system, but for those that do, the rates range from 0.01 percent in Mozambique to 22.15 percent in Seychelles. In South Africa, the rate is 11.7 percent. Somalia, Mali, Burkina Faso, Rwanda, Burundi, Lesotho and Mauritius also have rates between 10 and 17 percent. In Egypt, it is 6.4 percent. Other African countries with value added taxes between 5 and 9.99 percent include Niger, Cote d’Ivoire, Cameroon, Tanzania, Namibia, Zambia and Madagascar. African nations with a rate of less than 5 percent for value added taxes include Equatorial Guinea, Benin, Guinea, Liberia and Ethiopia.

Europe

According to Index Mundi, the value added taxes for European nations range from 5.62 percent in Switzerland to 22.43 percent in Croatia. Latvia has the second-highest tax rate, at 22.83 percent. Countries with a 10.00 to 19.99 percent value tax include France at 11.59, Portugal at 14.72, Turkey at 13.08, Ukraine at 18.96, Moldova at 17.34 and Finland at 17.11 percent. Some European nations with value added taxes of less than 10 percent include Germany at 7.11 percent, Ireland at 7.98 percent and Spain at 9.25 percent.

North and South America

Several countries in North and South America also levy value added taxes. Canada’s tax rate is unique because it combines a provincial or territorial and federal value tax, resulting in a range of 5 to 15 percent. Mexico has a tax rate of 16 percent. In South America, Colombia’s and Chile’s value added taxes on goods are 19 percent. Bolivia’s rate is 18.12 percent. Uruguay’s rate is 13.18 percent. Countries with tax rates in the middle range include Peru at 7.49 percent, Paraguay at 7.88 percent and Argentina at 7.45 percent. Brazil has the lowest value added taxes in South America, with a rate of 7.01 percent.

Value added taxes are often applied to goods in order generate revenue for national governments. Because they are a form of regressive tax, value added taxes are often criticized for causing a bigger impact on the finances of people who can least afford it. Knowing what countries use a value added tax helps a person know more about how governments get revenue.

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