How would you get to repay people their vat? Some will spend money on a higher percentage of items that VAT is paid on than others. You can't just give them a flat amount. At that point it is unworkable.
Also, VAT is a flat rate tax on everyone, everyone pays it. The people who would gain most from an all VAT option are those with higher incomes. Most people see it as a highly unfair option. If you think any government would try it think back to the poll tax. Or how do you fancy paying a 50% VAT rate on everything and get to see your real rate of tax?
You don't have to repay people based on spending - you set a figure and scale it off according to income - net effect being that someone on say 10k is still mostly out of the tax system. Obv people are still free to go spend more money and essentially be taxed further or to buy cigarettes incurring extra duty etc... people on higher incomes won't necessarily gain from taxing spending - you'd likely want to keep capital gains, income tax on dividends and stamp duty... its got very little to do with the poll tax
point is it would be interesting to see the effects of it being implemented somewhere - current system of taxing income has some obvious inefficiencies when it comes to allowances/deductions/loopholes... tax avoidance is a major issue - something as simple as introducing a penalty stamp duty rate of 15% for people buying homes through a company will instantly bring rich tax avoiders such as non-doms into the tax system I don't think we should discount ways of raising revenue other than income. Whether you're taxing income or spending or savings or capital gains or property transfers etc.. you can still introduced a buffer to prevent the poorest in society from being taxed - the main aim ought to be to introduce the most efficient system that prevents large scale avoidance and maximises revenue. For the ordinary people in the street the total amount of tax revenue collected doesn't have to change much simply because you change the means by which its collected.