This paper examines the impact of the introduction of the value-added tax on inequality and government revenues using newly released macro data. We present both conventional county fixed effect regressions and instrumental variable analyses, where VAT adoption is instrumented using the previous...

If the desire is to provide tax relief to households with lower and middle incomes in Germany, it is necessary to target the valueadded tax rather than the personal income tax. Lowering the standard value-added tax rate by one percentage point (from 19 to 18 percent) would mean relief worth 11...

Despite various reform efforts over the years, the tax system in the Philippines continues to suffer from chronic weaknesses. The Duterte administration is pursuing a simpler, more efficient, and more equitable tax system to support its economic growth strategy. The administration's...

We study the effect of inflowing remittances - a major source of capital for many countries - on tax-revenues and tax-policy. Instrumenting remittances with changes in the oil-price interacted with a country's distance to oil-producing countries, we find that remittances have a large positive...

Proposals to reform the personal income tax have gained prominence in recent months. To date, personal income tax reform is part and parcel of the platform of a number of the candidates in the 2016 presidential elections. This paper aims to evaluate the various proposals in both houses of...

To invest successfully it is critical to take the taxation of the investment of the investor into consideration. The following document is about the economic basics of an investment and the ascertainment of the advantages of the investment under the conditions of the complete and incomplete...

This paper utilizes an otherwise standard micro-founded general-equilibrium setup, which is augmented with a revenue-extraction mechanism to assess the magnitude of VAT evasion. The model is calibrated to Bulgaria after the introduction of the currency board (1999-2014), as one of the very few...

Using a panel of 97 mostly developing and transitional countries for the period 1990-2011, this paper explores fiscal implications of membership in the World Trade Organization (WTO). Em-ploying robust difference-in-difference specifications as well as semi-parametric methods, we find that...

Unconventional fiscal policy uses announcements of future increases in consumption taxes to generate inflation expectations and accelerate consumption expenditure. It is budget neutral and time consistent. We exploit a unique natural experiment for an empirical test of the effectiveness of...

Unconventional fiscal policy uses announcements of future increases in consumption taxes to generate inflation expectations and accelerate consumption expenditure. It is budget neutral and time consistent. We exploit a unique natural experiment for an empirical test of the effectiveness of...

Using panel data on the full population of corporate tax returns of Armenian firms, we study the behavioral response of firms to three size-dependent regulations. We find: i) a strong response to an accounting notch where International Financial Reporting Standards become mandatory; ii) a...

There is only limited evidence of how small firms respond to size-based regulations applied in various countries. We study this question by examining the value-added tax (VAT) threshold in Finland. We find sizable bunching of firms in the sales distribution just below the exemption threshold,...

To quantify fiscal multipliers in Eurozone countries, ECB, European Commission, and IMF draw heavily on large-scale DSGE models. In these models, the value added tax (VAT) is represented by a consumption tax, implying that changes in the tax liability directly translate into changes in consumer...

This paper shows a standard RBC model, when augmented with a VAT evasion channel, where evasion depends on the consumption tax rate, can produce a hump-shaped consumption Laffer curve. Furthermore, when the evasion channel is turned off, the hump in the Laffer curve disappears, resulting in a...

This paper explores the effects of fiscal policy in an economy based on indirect taxes, and in the presence of VAT evasion channel. In addition, the government is taxing all income at the same rate. The focus of the paper to compare and contrast two regimes - the exogenous (observed) vs. optimal...

The tax system forms the backbone to the functioning of the South African fiscal authorities and it is has been recently questioned whether alterations in the existing tax mix could promote economic growth. Using quarterly data from 1990:Q1 and 2015:Q2, this study investigated the effects of...

Rising prevalence of obesity among adults and children is a major policy issue in many countries. Two widely discussed instruments to address obesity are a tax on unhealthy foods (fat tax) and a subsidy on healthy foods (thin subsidy). We compare these two policies to a sales tax on all food...

In today's globalized world which is characterized by very quick changes, the need for cash is greater than ever before. The company's liquidity has become one of the most important categories in business. Tax changes that occur in the Republic of Croatia practically from one tax period to...

This report provides estimates of the VAT Gap for 26 EU Member States for 2013, as well as revised estimates for the period 2009-2012. It is a follow-up to the report “Study to quantify and analyse the VAT Gap in the EU-27 Member Statess, published in September 2013 (hereafter: 2013 Report),...

Value added taxes (VAT) are an important, and in many cases increasing, source of revenue in both developed and developing countries. Unsurprisingly there is an intense academic and policy debate about the appropriate VAT rate structure, for both equity and efficiency reasons. In this paper we...

In this paper we propose a reform of the EU financing system. The two most important elements of our proposal are i) to make the contribution of taxpayers to the EU budget more visible by showing an EU VAT share on receipts and ii) to increase the power of the European Parliament in the...

We develop a conceptual framework which captures the e¤ect of the VAT system on profit by two effective taxes. This allows (i) predictions of the determinants of voluntary registration and bunching at the registration threshold; (ii) develops a formula for estimating the elasticity of...

State borders create a discontinuous tax treatment of retail sales. In a Nash game, local tax rates will be higher on the low-state-tax side of a border. Local taxes will decrease from the nearest high-tax border and increase from the low-tax border. Using driving time from state borders and all...