The conventional wisdom is that a big jurisdiction sets a higher tax rate than a small jurisdiction. We show this result arises due to simplifying assumptions that imply tax-base sensitivities are equal across jurisdictions. When more than two jurisdictions compete in commodity taxes, tax-base...

Sales tax is generally not included in the advertised price quoted to consumers in the United States. In contrast, value added taxes (VAT) are embedded into the price in most other countries. This article investigates how the two different pricing structures and consumers' decision-making...

This paper studies the effects of transitioning from a system of sales taxes to a value-added tax (VAT) on firm-level outcomes. We construct a dataset of product- and state-specific tax rates before and after India gradually switched from a sales tax to a VAT. Exploiting staggered state-level...

Requiring firms, rather than individuals, to remit sales taxes improves tax compliance. In the U.S., this shift toward firm-based remittance rules for remote purchases occurred gradually after South Dakota v. Wayfair. Using comprehensive and high-frequency local sales tax revenue data, we show...

We develop a theory of commodity taxation featuring imperfect competition along with love-of-variety preferences and endogenous firm entry and exit, and we derive new formulas for the efficiency and pass-through of specific and ad valorem taxes. These formulas unify existing canonical ones and...

What is the effect of e-commerce on the geographic distribution of local sales tax revenues? Using COVID-19 as a shock to online shopping and hand-collected high-frequency data on local sales tax revenue, we document an important shift in the state and local public finance landscape. As...

The conventional wisdom is that a big jurisdiction sets a higher tax rate than a small jurisdiction. We show this result arises due to simplifying assumptions that imply tax-base sensitivities are equal across jurisdictions. When more than two jurisdictions compete in commodity taxes, tax-base...

In July 2020, the UK government reduced the VAT rate on hospitality services from 20% to 5% as an emergency policy intervention. Using a novel dataset of detailed hotel room characteristics in UK and elsewhere, we estimate how much the tax cut was passed on to consumers via a price reduction. We...

This article conducts a comprehensive bibliometric analysis of 182 papers to trace the progression of research on cryptocurrency taxation. The study highlights prevailing patterns, influential contributors, and collaborative networks by utilising data from Scopus and the Web of Science Core...

This note presents the results of the analysis of Value Added Tax (VAT) and Corporate Income Tax (CIT) compliance and policy gap estimates in Indonesia between 2016 and 2021. The study's objective is to quantify the magnitude of the tax gaps and to identify drivers behind the low efficiency of...

Improving domestic revenue mobilization extremely important for Zimbabwe to create the fiscal space to absorb quasi-fiscal expenditures and support macroeconomic stability. In November 2023, Zimbabwe announced measures to raise additional tax revenue. This included limiting value-added tax (VAT)...

As countries worldwide endeavor to fulfill the United Nations Sustainable Development Goal (SDG) 10, which emphasizes reducing inequality, there is a growing imperative to utilize tax policy and institutions to accomplish this objective. Hence, this study is inspired by this rationale. The aim...

Sales tax is generally not included in the advertised price quoted to consumers in the United States. In contrast, value added taxes (VAT) are embedded into the price in most other countries. This article investigates how the two different pricing structures and consumers' decision-making...

This paper studies the effects of transitioning from a system of sales taxes to a value-added tax (VAT) on firm-level outcomes. We construct a dataset of product- and state-specific tax rates before and after India gradually switched from a sales tax to a VAT. Exploiting staggered state-level...

Requiring firms, rather than individuals, to remit sales taxes improves tax compliance. In the U.S., this shift toward firm-based remittance rules for remote purchases occurred gradually after South Dakota v. Wayfair. Using comprehensive and high-frequency local sales tax revenue data, we show...

The objective of this study is to analyse the correlation between different types of taxation, price, usage, Human-Development-Index (HDI), affordability, and Gross-Domestic-Product(GDP) per capita. In particular, this work hypothesizes that there is a positive relationship between tobacco taxes...

Late or unreliable refunds of credits undermine the best traits of value-added tax (VAT) systems and might affect firms' growth and investment opportunities. This paper uses administrative tax records in Honduras to study a tax reform that decreased the withholding rate of value-added tax...

The special scheme for small enterprises ('SME scheme') allows small enterprises to sell goods and services to their customers without charging VAT (VAT exemption) and to get some simplifications regarding their compliance and invoicing obligations. This scheme is optional, so small enterprises...

From 1 January 2025, EU small businesses can use the VAT exemption in Member States where they are not established. They can do this through a single registration in the Member State of establishment, allowing them to fully benefit from the EU internal market.

Missing trader intra-Community (MTIC) fraud is a prominent form of VAT non-compliance, which involves a fraudulent trader supplying goods and services to other businesses, collecting the tax due on the supply, and then disappearing without remitting it to the tax authorities. This type of fraud...

A specific form of VAT non-compliance in the EU that warrants particular attention is missing trader fraud. This scheme involves a fraudulent trader supplying goods and services to other businesses, collecting the tax due on the supply, and then disappearing without remitting it to the tax...

The VAT compliance gap measures the difference between the VAT revenue that would be collected in the case of full compliance and the actual revenue collected. The actionable VAT policy gap measures the VAT revenue foregone due to those reduced VAT rates and exemptions which could, in principle,...

Value Added Tax (VAT) in the European Union (EU) is a broad-based tax levied on goods and services used or consumed in the territory of the EU. It serves as one of the core revenue sources for the general government of EU Member States. In 2023, the VAT revenue-to-GDP ratio amounted to 7.2% of...

Purpose: This study aims to propose a potential tax model for taxing e-commerce transactions in Malaysia. Design/methodology/approach: A qualitative approach was employed in this study to unravel methods for taxing e-commerce transactions in Malaysia by interviewing key policymakers, tax...

We propose a new data resource that attempts to overcome limitations of standard firm-level datasets for the UK (like the ARD/ABS) by building on administrative data covering the population of UK firms with at least one employee. We also construct a similar dataset for France and use both...

Low-income countries face the combined challenges of climate shocks and limited domestic revenue mobilization, yet these issues are rarely studied together. This paper provides new evidence on the impact of climate shocks on firm performance and tax revenue in a lowincome country context, using...

Missing Trader Intra-Community fraud (MTIC fraud) is a type of VAT fraud under which a fraudulent trader supplies goods and services to other businesses, collects the tax due on the supply from their customers, and disappears without ever remitting it to the tax authorities. This phenomenon...

Although agriculture is an important source of greenhouse gas emissions, the sector remains out of scope for greenhouse gas (GHG) pricing policies. To align the future food system with the transition to net zero emissions, two key questions arise: To what extent can tax policies help achieving...

This study explores the estimation of the VAT gap using the Multiple Indicators and Multiple Causes (MIMIC) model, a specific type of structural equation model. The VAT gap, a significant indicator of tax revenue loss and inefficiency in VAT collection, is treated as a latent variable driven by...

We use novel transaction-level card expenditure data to estimate the effect of the temporary value-added tax (VAT) cut in Germany 2020. We find that the annualized growth rate of expenditures for durables increased by 6 percentage points (pp) during the tax cut, with a particularly strong...

Refunds are an essential feature of well-functioning VAT systems and take up a sizeable portion of government spending. In South Africa, refunds amount to 50 per cent of gross VAT collection, representing a substantial transfer from the government to taxpayers that has to occur at relatively...

Most countries' value-added tax (VAT) systems apply reduced VAT rates to a selection of expenditure items in order to achieve distributional goals, and (to a lesser extent) social and cultural objectives. This paper assesses the case for applying reduced VAT rates, with a particular focus on...

This study employs computable general equilibrium (CGE) model to estimate the effect of increase in value added tax (VAT), from 5 per cent to 7.5 per cent, on import demand and sectoral output in Nigeria. The study uses 2020 as the base year for the data analysis. The results show that increase...

This report gives a high-level overview of tax policy across the period 2010 to 2024. An appendix summarises the main tax policy changes. There are some clear distinctions between the governments before 2019 (including the coalition government of 2010-15) and the governments from 2019. Most...