Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/322529 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 11967
Publisher: 
CESifo GmbH, Munich
Abstract: 
The introduction of the Value Added Tax (VAT) has been widely perceived as a successful instrument, boosting government revenue and stimulating industrialization. However, in countries that are heavily dependent on exports of natural resources the introduction of the VAT has led on average to lower tax revenues and did not stimulate industrialization. The VAT thus did not help these countries to diversify away from the natural resource sector contrary to its promise. The results indicate a novel channel for the resource curse hinging on the interaction between economic structure and the design of tax systems.
Subjects: 
natural resource
tax
industrialization
value added tax
JEL: 
H25
O13
O14
Document Type: 
Working Paper
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