Study of Executive Challenges of VAT and its Inconsistency with the Principles of Islamic Tax

Abstract VAT has been levied with goals such as expanding tax bases and increasing government tax revenues, transferring tax from production and investment to consumption, avoiding double taxation, organizing numerous and disparate tax and complications, and development of financial and tax information through the clarification of economic activities. But its improper implementation may cause some negative consequences. for example, since in the process of production, VAT is received from Entrepreneurs and repaid to them, it remains for a long time with the government and some entrepreneurs, and can harm some others, especially in terms of recession. ownership of received VAT and capturing in it, in the stages before the final consumption, is vague. This kind of tax, is accompanied with tax discrimination and transfers the tax burden, in some activities, and deepens their recession. This tax is not compatible with Islamic principles which do not established any duty on necessary consumption. this article, answering the question of the main challenges of the VAT, suggests this hypothesis that the major challenges of VAT are executive, and its proper implementation can make it more efficient. The outcome of the article is a fairly comprehensive explanation of this tax.Keywords: tax, VAT, Islamic tax, consumption tax