VAT & Governance: Evidence from Countries around the World

The importance of governance indicators and institutional factors in growth and economic development needs to be reconsidered. In another word, tax reform, tax system and introduction of VAT play an important role in creating new revenues for government. In recent years many countries have implemented this tax .Therefore, this study will examine the impact of introducing VAT on governance indicators .We will use the recent data available for governance indicators up to 2008 for all countries around the world which have access to the relevant statistical data .Our findings based on comparing the mean of governance indicators before and after implementing VAT using SPSS package show a better governance in most countries under considerations