countries is not so apparent. Many countries may be blessed with an ample supply of competent economic analysts available for cabinet positions, but not many (including, perhaps, the Indonesia of the future) can count on them staying in office long enough to duplicate the achievements of the Indonesian economic team of 1970-1990.
The consumption-type VAT taxes only consumption goods. Capital goods are excluded by allowing taxes paid on their purchases to be credited against taxes due on sales. An alternative to the consumption VAT is the income-type VAT, which has for its base all types of income including capital income. Among LDCs, only Argentina, Peru, and to some extent Turkey have chosen the income-type VAT over the consumption type, although the early Colombian VAT ( 1966-1984) was of the income type.