Although the value-added Tax, or VAT, is one of the most commonly used taxes in the world, it is a relatively new instrument for revenue collection. The U.S. could adopt a VAT to promote fiscal stability and growth, improve tax administration, and foster international marketability.

Most commentators agree that the first VAT was instituted by France in 1948. The VAT began to spread during the late 1960s and early 1970s, with a significant number of European and South American countries adopting it during this time. However, it was not until the 1990s that VAT adoption became commonplace.

This article by KPMG LLP's Washington National Tax group, the second in a series of "Views on VAT" from Tax Notes, discusses the general factors that often lead countries to adopt a VAT and evaluates those factors as applied to three countries with government structures similar to that of the United States. The article further discusses how those three countries' experience with adopting a VAT could prove relevant to the VAT debate in the United States.