 Income tax has been levied at a flat rate of 20% set by the occupying Germans during the Second World War.Because value added tax (VAT) has not been levied in the island, luxury goods have often been cheaper than in the UK or in France, providing an incentive for tourism from neighbouring countries.The absence of VAT has also led to the growth of the fulfilment industry, whereby low-value luxury items, such as videos, lingerie and contact lenses are exported, avoiding VAT on arrival and thus undercutting local prices on the same products.