I’ve heard many attention-grabbing examples of nuances and problems of gross sales taxes/VAT, from the well-known biscuit versus cake and Jaffa desserts controversy, to the truth that a gross sales tax in California hinged on whether or not animals in a zoo had been edible and in the event that they, in flip, had been those consuming meals, versus both an edible animal or a human. However, this morning, somebody despatched me one other superb instance. The VAT within the U.Ok. might rely, allegedly, on whether or not a gingerbread cookie is carrying pants. From Stipe.com:
Take into account the remedy of youngsters’s favourite tax avoider, the gingerbread man. In the UK, if a gingerbread man has simply two chocolate eyes, it’s legally a biscuit (tax exempt). Nonetheless, if that gingerbread man can also be carrying chocolate pants or a shirt, it’s now legally taxed at a typical fee of 20%. We puzzled over whether or not we would wish so as to add a boolean is_a_gingerbread_man_wearing_pants to the API earlier than rejecting this strategy.
That is all, after all, within the grander scheme, a part of the grand trade-off. We are able to have taxes which are extremely fine-tuned to serve precisely and particular functions, or, we will have taxes which are straightforward and easy to manage. We regularly can’t have each. So, in instances after we need to wonderful tune, it’s going to then find yourself, in not less than one case, relying on whether or not the gingerbread man is carrying pants.
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