After the new Congress took office in Eclesiar India, one of its first major economic decisions is a proposal to set VAT at 5%.

So, what does that actually mean?

VAT (Value Added Tax) is a tax applied to transactions in the economy. In simple words, when something is sold, a percentage of its value can go to the government as tax.

With a 5% VAT, an item worth 100 INR would have 5 INR of VAT, making the total 105 INR if the tax is added directly to the buyer's price.

Why does it matter?

VAT affects everyday economic activity. A lower VAT means less tax is added to transactions, while a higher VAT means more tax is collected.

The government therefore has to balance tax revenue with the effect taxes can have on players and businesses.

Eclesiar's Congress system allows Congress members to propose changes to VAT, along with other laws such as import tax and minimum wage. (Eclesiar)

The new 5% VAT is therefore more than just a number — it is one of the first economic decisions of the new Congress.

The Ink — India