This thesis addressed the concept of strategic management and strategic decisions, maintaining that the introduction of VAT into the Sudanese tax system was a strategic decision . The thesis tried to prove this contention .
Accordingly this study examined all the taxes within the Sudanese Taxation Chamber, those which are still functioning and those which have been abolished. As such our coverage was wide and comprehensive. Undoubtedly the interests of both the administrators and the taxpayers are considered .
Strategic management is defined as the choice of the decisions and the actions that result in the formulation and implementation of plans designed to achieve a company’s objectives . It involves those decisions and actions in which organizational members analyze the current and the future situations, develop appropriate strategies, put those strategies into action, and evaluate, modify or change those strategies as needed .
Tax is defined as a compulsory levy made by public authorities for which nothing is received directly in return . Taxes are usually divided into direct and indirect taxes . VAT is considered as an indirect tax . Although titles vary and there is a significant variation across countries, yet the essence is that “ VAT is a broad-based tax on sales of goods and services, with systematic crediting of tax paid on inputs\\\\\\\". VAT is also applied on imports .
The thesis addressed six objectives which are concerned mainly with the success and/or failure of VAT in achieving the objectives of its introduction .
The first objective was to study and relate theoretical (plans and programs) to the practical side by VAT application as a strategic decision . The second objective was to provide an assessment of the tax system for both direct and indirect taxes. Objectives from No. (3) to no. (6) were concerned with an investigation of the origin of VAT, its suitability in the Sudan, an assessment of Sudanese VAT, to provide an assessment of the importance of automation and the problems which are facing the system .
There are various ratios which can be used to assess the performance of VAT by comparing those ratios with other countries especially those countries which have similar economic situations :
=607; VAT revenue as a percent of tax revenue,
=607; VAT revenue as a percent of GDP,
=607; The efficiency ratio, C. Efficiency ratio and the portion of tax collected on imports compared to revenue collected by VAT department .
To attain the objectives of the study, the research raised many questions that need to be answered:
The first question raised by the research is about the strategy of the Sudanese Government regarding revenue especially non-oil revenue after the exploration of oil. Another question is whether taxes are going to remain the only necessary means to tap the resources which will enable the state to achieve it\\\\\\\'s economic ,social and political objectives .More questions were raised about the ability of VAT to broaden the tax base and the tax umbrella ,increase the total revenue and reduce the deficit in the general budget, eliminate cascading effects ,ease tax administration ,means to tap the resources which will enable the State to achieve it increase the country\\\\\\\'s exports ,encourages savings and investments , reduce and reduce evasion. There are also further questions about the effects of vat on inflation, justice and on other taxes like income tax.
In order to link the application of VAT in the Sudan to strategic decisions, the thesis questioned whether strategic issues require decisions by top management i.e. top –management involvement, whether they require large amounts of resources whether they affect the organization\\\\\\\'s long-term prosperity, and whether the strategic decisions are affected by the external environment and the external conditions. s .
The thesis was structured into three parts and ten coherent chapters. Part one covered an introductory chapter, literature review of taxation, research methodology and tax default . Part two covered tax reform, assessment of Sudanese taxes and tax administration . Lastly part three covered the adoption of VAT, problems facing VAT in the Sudan and conclusions and recommendations .
The study and analysis of the above-mentioned objectives and questions, produced many and various results and conclusions with respect to the subject under consideration. The conclusion drawn about strategic management is that it is necessary to all kinds of organizations whether private, public, profit-seeking or for non-profit . In this regard it also proved that there is a lack of follow-up of the execution of strategic decisions especially from the side of the government .
As paying tax to a tax authority is not something most people wish to do more than they have to, the study proved that tax avoidance and evasion is a common activity among taxpayers even within the VAT system which is assumed to be self-controlling . Likewise, conclusions were reached maintaining that the application of VAT is good for exports, removes cascading effects, encourages saving and collect more information about other taxes especially Income Tax . This will in turn result in sizable increases in revenue . Finally we concluded that VAT in the Sudan is still young and that the implementation of VAT is the start of a process which should be seen as a continuing process of improvement in both design and implementation .
Recommendations were divided into: general, VAT in general and VAT in the Sudan . Generally, tax reform is recommended to be an on-going process and should reflect the realities of changing situations . As the tax administration plays a crucial role in determining a country’s real (or effective tax system), it was recommended that the organization of administration should move away from tax-based to function-based organization as shown by our pilot study . In the same way the tax administration is recommended to shift to voluntary assessment .
Recommendations were proposed regarding scaling back exemptions and taking care of the salaries of tax administrators to curtail corruption .
Regarding VAT in general, the study recommended mainly to look after the sectors which are left out of the VAT net (e.g. financial sector, and the location-less consumption sector which is developing) .
Regarding VAT in the Sudan, it was recommended to scale back exemptions which are eroding the tax base, and to stick to the standard (single) rate so as not to complicate the tax administration . It was also recommended to convince people to use invoices and keep accounting records as these are crucial for the success of any VAT . There are many other recommendations which could be proposed and would improve the future performance of VAT