Open innovations

Stacked VAT [a government tax innovation] {2018002}

The issue

Business needs to report their Value Added Tax every quarter. They report what they have to pay over their earnings and what they reclaimed over their purchases. To me this seems a typical case of bad process design due to poor understanding of the real life process driving it.

Our solution: stacked VAT

By applying two rules, VAT can become much easier and les admin burdened. These rules are:

  • VAT never can be reclaimed
  • VAT has to be a low percentage on any invoice

The carrots example

Lets assume a VAT of 6%.

On carrots bought from the farmer 6% is payed. In the grocery shop an other 6% is payed over the grocery price. In fact making the VAT on the farmer price 1.06 x 1.06 = 1,12. Thus 12% VAT. On carrots in a pot in the supermarket, the VAT over the farmer price is 1.06 x 1.06 x 1.06 = 1.19. Thus 19%.

The benefits

  1. Direct economic contributions (labour, farming, building, writing, art, .. etc) are low taxed.
  2. If the government facilitates this with a VAT payment bank-account. The VAT process can be highly automated. And easily be controlled automatically.
  3. Less administration. Thus, can be collected decentralized with an organization more focused on fraud.

Embraced invoice numbering [a business administration innovation] {2018001}

The issue

Banks only provide a description field for a transaction. The invoice-number for a payment is therefor mostly a part of the description text. To match the invoice with the payment after uploading or synchronizing the bank transactions into an administration is a gamble. Although with high probability. The issue is to make it a 100% match.

he solution / Embraced invoice numbering

If we all would apply the following standard for writing invoice numbers, a 100% match can be ensured.

The standard is to embrace invoice-numbers with ** and **.

Thus the invoice number 83746AB635 thus would be printed and written in de bank-transaction description as **83746AB635**

Why ** - **? Because this is the character frequently available on a number pad. This enables quick entry in number orientated environments.

This notation also makes invoice number recognition language independent.

**83746AB635** انوائس نمبر

or Nambari ya ankara **83746AB635**

or 發票號碼 **83746AB635**

or номер счета-фактуры **83746AB635**

They are all recognisable as invoice number 83746AB635.

Better calendar[2015001]

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