In the postcolonial era, tax reforms in many developing/emerging economies resorted to indirect taxes under the presumptions of broadening the tax base and achieving horizontal equity. But, leakage in the form of evasion had challenged the attainment of these objectives, and continues doing so even after half a century of constant churning by tax architects to arrive at an optimum solution. The ease of evasion is indicative of the gap in the “lab to land” transfer of technique. From a theoretical standpoint, the goods and services tax, based on the principles of value added tax, can potentially address much of the malaise afflicting VAT in a federal polity, and may also offer the desired bridge for an informal economy to move towards the realm of formalisation in the long run.
