Chapter 4 | Page 146 international tax rules have created an environment that encourages tax avoidance, especially by large corporations through transfer pricing and other such practices.24 These issues will be addressed later in this chapter. In recent years, a number of governments have introduced a Goods and Services Tax (GST)/ Value Added Tax (VAT)25, which is a broad-based tax levied on consumption. Although a regressive form of taxation, it is estimated that currently more than 130 countries implement GST, which has helped many States reduce their reliance on trade taxes.26 GST is also identified by economists as one of the most efficient taxes in terms of implementation and collection and it has been adopted in most emerging markets without broadening the tax base.27 Some critics, however, argue that GST discourages firms operating in the informal sector to move out to the formal sector, thereby negatively impacting development and welfare.28 The self-enforcing nature of GST in developed countries―incentives for downstream firms reporting purchases so that they can get rebates―is often absent in poor countries because a substantial part of production takes place in the informal sector and sales are often made in cash.29 For these reasons, the standards used in developing and implementing GST often ignore very important economic considerations, namely, the existence of non-tradable and intermediate goods, differential Harvey (eds), Human Rights and Public Finance: Budgets and the Promotion of Economic and Social Rights (Hart Publishing, Oxford, 2013) 77. 24 Delamonica and Mehrotra, above n 21, 101. 25 GST and VAT are used by different countries but with the same meaning. For example, while in Australia it is referred to as GST, in Britain it is referred to as VAT. Both terms are used interchangeably in this thesis. For consistency, ‘GST’ will be used in this thesis to refer to this category of taxes. 26 Fjeldstad, above n 8. 27 International monetary Fund, Fiscal Monitor: Taxing Times (IMF, Washington, D.C., 2013), <http://www.imf.org/external/pubs/ft/fm/2013/02/pdf/fm1302.pdf>. 28 M Shahe Emrana and Joseph E Stiglitz, 'On selective indirect tax reform in developing countries' (2005) 89 Journal of Public Economics 599-623. 29 Joseph E Stiglitz, 'Development-Oriented Tax Policy' (Initiative for Policy Dialogue Working Paper, IPD, October 2009), <http://academiccommons.columbia.edu/download /fedora_content/download/ac:154001/CONTENT/IPD_WP_DevelopmentOriented_Tax_Policy.pdf>.