Question

how would VAT reduce the evasion of taxes on goods?​

Answer 1

Answer:

It is a clear and transparent method of tax collection, which broadens the tax net, and helps to monitor a large number of people.

It is also a rationalised tax structure; practised and proven to be successful in many leading economies. The VAT regime will help to curb tax evasion and add more revenue to the state exchequer.

Answer 2

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$\green\longmapsto\:$ All producers and traders will have to keep genuine record of their Sale and purchase.

$\green\longmapsto\:$ Everyone has to keep proper records and ask for bills for purchase.

$\green\longmapsto\:$ It is only on this basis they can show the tax already paid on cost of inputs.

$\green\longmapsto\:$ The tax inspector will be able to match records of the seller and purchaser for verification.

$\green\longmapsto\:$ These records and verifications in VAT reduce the evasion of taxes on goods.