Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129445
Authors: 
Alavuotunki, Kaisa
Pirttilä, Jukka
Year of Publication: 
2015
Series/Report no.: 
WIDER Working Paper 2015/111
Abstract: 
The adoption of the value-added tax has arguably been one of the most important tax policy measures worldwide, but is also one of the most heatedly debated. While some argue that the VAT has served as a useful tool to boost government revenue, others claim that it is also a regressive tax, contributing to increased inequality within the developing world. Using newly released high-quality macro data, this paper offers updated estimates of the revenue impacts of the VAT and the first estimates on its consequences on inequality at the macro level. The results from instrumental variable estimations reveal that the revenue consequences of the VAT have not been positive, contrasting results from earlier work. VAT adoption has not led to increased inequality, suggesting that the move to the VAT has not undermined equitable development.
Subjects: 
tax policy
value-added tax
inequality
developing countries
JEL: 
H23
O23
ISBN: 
978-92-9256-000-3
Document Type: 
Working Paper

Files in This Item:
File
Size
885.78 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.