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A thread on @michaelgove’s plan to replace VAT with a sales tax. TLDR: this is a very bad idea.
VAT is not just a “Euro tax.” It is used in 35 out of 36 OECD countries (the only exception being the US). And in 168 countries world wide.
That is not an accident. VAT is well-designed tax to tax consumption in a neutral way. Here is a brief description of how it works. (The graph above the first page shows how VAT has spread round the world.) 
As the OECD explains, a principal advantage of VAT is neutrality.
The US operates a retail sales tax. Explained here.
But here is the serious disadvantage of a RST compared to VAT.
Critically, RST works at all only if rates are very low compared to VAT (now at 20% standard rate in the UK).
In the US, RST is a local or State tax, and rates are low, partly due to the difficulties mentioned above (and also because of tax competition between local areas).
It is hard to conclude from the description of RST here that it is any easier for businesses to operate than VAT. Indeed, it can raise the tax burden on business. So the “business burden” justification won’t wash.
And anyone proposing this needs to explain how they are going to raise the ~£130bn a year currently raised by VAT at 20%. Because an RST won’t bear a rate of even 10%.
Is VAT perfect. No it isn’t. But the problems with it tend to centre round exclusions and exemptions (eg the well known “cake or biscuit” or “is it a crisp?” cases surrounding our - entirely U.K. invented - rules on the zero-rating of food).
If you want to reform VAT and make it easier for business and less of a “fiscal theme park” (as it was described in one case) have a good look at those exemptions and exclusions. If you want to cut VAT fine: but explain where the £ will come from instead.
But don’t replace it with a system that works less well, raises less money, and imposes more economic and compliance burdens on business.
Questions @AndrewMarr9 might think about asking this morning.
