The rationale behind is sound but the trick is to design the rules so that all gains aren't lost in the cost for administering the rules. Differentiated VAT and

The rationale behind is sound but the trick is to design the rules so that all gains aren't lost in the cost for administering the rules. Differentiated VAT and/or deductions are notoriously expensive and prone for cheating. It is very difficult/expensive to check if a service provided was the repair of an existing item or a new item installed (or something else entirely).