Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229484
Authors: 
Asatryan, Zareh
Gomtsyan, David
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8666
Abstract: 
Who benefits from the evasion of value added taxes (VAT)? Using a reform that enforced VAT on previously non-compliant large retailers in Armenia, we estimate a one-third passthrough of the tax burden on prices. This suggests that pre-enforcement evasion rents were broadly shared with consumers through lower prices. Our theoretical and empirical results explain this low passthrough rate by the supply-chain effects and second-order compliance responses of firms to VAT enforcement. Our distributional analysis shows that households at the bottom of the income distribution benefit more from the rents of evasion.
Subjects: 
value added tax
incidence
passthrough
evasion
enforcement
distributional effects
JEL: 
D11
H22
H26
Document Type: 
Working Paper

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