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133Total size of GE’s global indirecttax team, up from zero, 17 years ago

20%The current standard VAT in Morocco,compared with 16% in Kenya, 14% in South Africa and 5% in Nigeria

The proportion oftax policy-makerswho expect indirect taxesto generate more revenuein the future

69%

The average tax revenueacross the Organisation forEconomic Co-operation andDevelopment (OECD) that wasaccounted for by VAT in 2012,compared with 8.8% in 1975

The riseof indirect tax

Amount that could be raised in the US by a European-style value–added tax (VAT) system with a 20% standard rate

1954 France becomes the firstcountry to introduce VAT

1967 Brazil and Denmark introduceVAT, soon followed by Germany,Sweden and the Netherlands

1969 Eight countries have introducedVAT

1991 South Africa and Canadaintroduce VAT, followed laterin the decade by Poland and Switzerland,among others

2001 Worldwide, 129 countries nowhave VAT

2006 A European Council Directiverequires Member States to havea minimum VAT standard rate of 15% and one or two reduced rates not to be below 5%

2009 VAT receipts represent anaverage 7.4% of gross domesticproduct (GDP) among EU Member States

2010 The European Commissionreleases a Green Paper recommending“a broad-based VAT system, ideallywith a single rate”

2011 Hungary announces that itsstandard VAT rate will rise to 27%in 2012 – the highest in the EU

2012 Some form of VAT and GST applies to 156 countries worldwide, accounting for an average of 20% of total tax revenue

HungarySwedenUnited KingdomGermanyRussiaSouth AfricaSwitzerlandSingapore (GST)Japan (consumption tax)United Arab Emirates

27%25%20%19%18%14%8%7%5%0%

Country

*2012

Standard ratein selected countries

Value added tax (VAT)

Source: HSBC Expat Explorer 2011, Atlas Corporate Relocation Survey 2011, Ernst & Young Global Mobility EffectivenessSurvey 2011, EIU — Up or out: Next moves for the modern expatriate 2010; graphic: Käthi Dübi

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US$1,000,000,000,000

1973 The UK, Austria and Italyintroduces VAT

1986 New Zealand introduce a goodsand services tax (GST)

1989 Japan becomes the 53rd countryto introduces a VAT system

Six global indirect tax trends

Refining of consumptiontax systems

Reducing customs duties,arising from more free trade

Rising VAT and GST rates

Broadening base for VAT and GST

Renewed efforts by taxadministrations on complianceand avoidance, aided by use of advanced technologies

Rising excise duties

18.7%

EU-27Ave

rage

sta

ndar

d VA

T ra

te

18

19

20

21

22

20

00

20

02

20

04

20

06

20

08

20

10

20

12

Source: Indirect Tax in 2012, Ernst & Young

Average VAT rates across the EU-27