The introduction of VAT raises a number of economic and social effects. Although every economic reflex is related to social one, this study focuses on the social effects of introduction of this tax.
Many of points have been studied. The most importa
nt points are the relation of this tax to the economic surplus and the distribution of the national income, its effects on the governmental and consumptive expenditure, the extent to which this tax will realize the tax and social justice, its relation to poverty, and how it will affect the social classes.
It has been concluded that vat could help in directing the consumption and savings policies by influencing the purchasing power. VAT affects the consumptive expenditure and leads to decrease as a result of prices raise accompanied by its. Its relation to the social justice is related to how the government will do regressive treatment of this tax.
