Quasi‐experimental Analysis on the Effects of Adoption of a Value Added Tax

Ufier, Alex

doi:10.1111/ecin.12099

Cited by 22 publications

(21 citation statements)

References 34 publications

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“…The result is consistent with the theory that suggests that a VAT adoption will have a step effect that could build up over time given the lags of the economy. The result is also consistent with Ufier (), which finds that VAT adoption is associated with GDP per capita growth rate ranging from 0.38% to 2.17%. However, are these positive results representative of all countries?…”

Section: Resultssupporting

confidence: 89%

“…A similar pattern is also found in the developing countries of sub‐Saharan Africa and Asia. The copycat behavior in VAT adoption is also demonstrated in more systematic studies by Keen and Lockwood (), Ufier (), and Cizek, Lei, and Ligthart ().…”

Section: Introductionmentioning

confidence: 56%

“…The data on the treatment indicator, that is the year the VAT was introduced, is obtained primarily from Ebrill, Keen, and Bodin () and supplemented by International Tax Dialogue () and Ufier ().…”

Section: Conceptual Framework and Datamentioning

confidence: 99%

“…Thus, any country that needs IMF's assistance has a much higher probability of adopting a VAT. For instance, Keen and Lockwood (), Ufier (), and Cizek, Lei, and Ligthart () find that the probability of a VAT adoption increases by up to 25% in the year following the country's participation in IMF programs. Ebrill, Keen, and Bodin () estimate that more than half of all countries that introduced a VAT during the 1980s and 1990s used IMF advice in doing so…”

Section: Introductionmentioning

confidence: 99%

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Does a Value‐added Tax Increase Economic Efficiency?

Adhikari

2019

Economic Inquiry

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Theory predicts that a value‐added tax (VAT) is an efficient tax system, which is one of the primary reasons for its rapid adoption worldwide. However, there is little empirical evidence supporting this prediction, especially for developing countries. I estimate the efficiency gains of introducing a VAT using the synthetic control method. I find that a VAT has, on average, positive and economically meaningful impact on economic efficiency. This result, however, is driven by richer countries only. There is no significant impact of the VAT on poorer countries. The findings are robust across a series of placebo studies and sensitivity checks. (JEL H20, H25, O40, E6)

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Section: Resultssupporting

confidence: 89%

Section: Introductionmentioning

confidence: 56%

Section: Conceptual Framework and Datamentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Does a Value‐added Tax Increase Economic Efficiency?

Adhikari

2019

Economic Inquiry

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“…First, it is related to existing studies evaluating the effects of the VAT on international trade. Desai and Hines Jr () find that the VAT substantially reduces the volume of trade, while Keen and Syed () and Ufier () find no significant effects on trade. My results are especially related to Desai and Hines Jr (), who also find a stronger negative effect on trade for developing countries as compared to developed countries.…”

Section: Introductionmentioning

confidence: 99%

Does the Vat Tax Exports?

Sharma

2019

Economic Inquiry

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While a VAT should in principle be neutral with respect to international trade, it may in practice function as a tax on exporters' input purchases if firms receive incomplete VAT refunds. Using data for over 100 countries that span the majority of historical VAT adoption episodes, this paper finds that—consistent with this hypothesis—the VAT reduces the exports of an industry with a 10 percentage point higher intermediate goods share of output by over 8% relative to an industry with a lower share. This effect is driven by developing countries and is absent for high‐income countries. (JEL F13, F14, H25, H87, O11)

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Tax transition in developing countries: do value added tax and excises really work?

Adandohoin

2021

Int Econ Econ Policy

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This paper investigates the role of Value Added Tax (VAT) and excises in first wave tax transition (movement away from international trade taxes towards domestic revenue collection) of developing countries. Focusing on a sample of 96 developing countries over the period 1985-2013, we investigate whether the adoption of VAT enables developing countries to increase the likelihood of succeeding tax transition. Results indicate that having a VAT, allows developing countries to increase the probability of succeeding tax transition by 12%. We further investigate the extent to which VAT and excises offset trade tax revenue losses of trade liberalization in these countries. Our estimates reveal that VAT is offsetting for about 52% trade tax revenue losses in developing countries with a U relationship, while this effect holds for excises duties with a U inverted relationship. The study also points out heterogeneities (while VAT adoption tax transition effect is robust to African and Asian countries, it seems not for Latin American countries), as well as asymmetries (the revenue collection of VAT and excises didn't increase the period over which developing countries face an increase in trade tax). While enhancing tax administration fosters the transition process in these countries, the study however suggests taking with closer attention VAT and excises as powerful first wave tax transition tools in developing countries.

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Quasi‐experimental Analysis on the Effects of Adoption of a Value Added Tax

Cited by 22 publications

References 34 publications

Does a Value‐added Tax Increase Economic Efficiency?

Does a Value‐added Tax Increase Economic Efficiency?

Does the Vat Tax Exports?

Tax transition in developing countries: do value added tax and excises really work?

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