The optimal size of project from the economic perspective.

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Chapter 5.A, Problem 2ARQ

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The optimal size of project from the economic perspective.

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There are many different ways that governments collect taxes. In Zambia alone there are income taxes, taxes on copper and other mining royalties, taxes on property and financial transactions among others. One common tax is sales tax. Sales taxes are collected by the retailer when the final sale in the supply chain occurs via a sale to the end customer. In some parts of the world, however, rather than a sales tax, there is a Value Added Tax (VAT). In a VAT system taxes are collected by all sellers in each stage of the supply chain. Suppliers, Manufacturers, Distributors, and Retailers all collect the VAT on applicable sales and consumers pay the VAT on their purchases. The Zambian government in recent years has heavily debated the merits of which system is better a national sales tax on end purchase transactions or a VAT which collects taxes at each stage. For the purposes of this research paper, debate whether Zambia should have a national sales tax system or a VAT system. Which…