The Effects of the Value-Added Tax on Revenue and Inequality

Alavuotunki, Kaisa; Haapanen, Mika; Pirttilä, Jukka

doi:10.1080/00220388.2017.1400015

Cited by 65 publications

(55 citation statements)

References 34 publications

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“…The loss of income tax revenues will compensate for the growth of indirect tax revenues. Alavuotunki et al (2019) state that income-based inequality has increased due to VAT adoption. Lin & Jia (2019) recommends that tax cuts will have a favorable implication for the economy if a country has reached the top of the Laffer curve.…”

Section: Methodsmentioning

confidence: 99%

Value Added Tax and Economic Growth: An Empirical Study of China Perspective

Zeraibi

Mukherjee

2019

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This study investigates the role of Value-Added Tax (VAT) on the economic growth in China. The data used for the study is a time series of the period from 1985-2016. These researches use the gross domestic product (GDP) as a dependent variable. For the independent variables, this research using the total population, employed persons, consumer price index, and value-added tax. The current findings add to a growing body of literature on identifying the properties of VAT in China and identifying the tax system reform from 1993 to 2012 and the mechanism of transfer application of the business tax in the services sector to Value-Added Tax. The test result indicated to have a positive relationship between the GDP and independent variables value-added tax in both in the long and short run. AbstrakPenelitian ini bertujuan menyelidiki peran pajak pertambahan nilai (PPN) terhadap pertumbuhan ekonomi di Cina. Data yang digunakan untuk penelitian ini adalah deret waktu selama periode 1985-2016. Variabel dependen yang dipergunakan ialah produk domestik bruot. Sedangkan variabel independennya ialah jumlah penduduk, orang yang dipekerjakan, indeks harga konsumen, pajak pertambahan nilai. Temuan saat ini menambah literatur yang berkembang tentang mengidentifikasi sifat-sifat PPN di Cina dan mengidentifikasi reformasi sistem perpajakan dari tahun 1993 hingga 2012 dan mekanisme aplikasi transfer pajak bisnis di sektor jasa ke Pajak Pertambahan Nilai. Hasil penelitian menunjukkan terdapat pengaruh positif dan signifikan antara variabel dependen (PDB) dan variabel independen (Re, PPN) baik dalam jangka panjang maupun jangka pendek.Kata Kunci: pajak pertambahan nilai, pertumbuhan ekonomi, sistem perpajakan JEL Code: F43, H21

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Section: Methodsmentioning

confidence: 99%

Value Added Tax and Economic Growth: An Empirical Study of China Perspective

Zeraibi

Mukherjee

2019

Signifikan

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“…These findings are divergent to the outcome of this study that revealed a positive relationship between tax gap realized and capital expenditure on economic services. Alavuotunki, Haapanen and Pirttilä (2019) reported that Value Added Tax caused inequality in income base and there was no effect on consumption inequality, this result is in contrast to Sok-Gee, Zulkufly and Mohd Zaini (2017) who noted that Value Added Tax enhanced government spending on economic growth and that government spending promotes economic growth. The outcome of this study aligns with the position of Sok-Gee, Zulkufly, and Mohd Zaini (2017).Adegbite, (2018); Onuora, Okegbe and Ezejiofor (2017); Ibadin and Oladipipo (2016) all agreed with empirical evidence thatValue Added Tax is significant in the Nigerian economy.Results from the studies revealed that Value Added Tax had an overall significant effect on Economic growth and this position aligns with the outcome of this study.…”

Section: Diagnostic Testmentioning

confidence: 73%

Value Added Tax Gap and Capital Expenditure over Economic Services in Nigeria

Akintoye¹,

Mary²

2020

theijhss

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Value Added Tax Gap and Capital Expenditure over Economic Services in Nigeria 1. Introduction Every individual desire`s to live a comfortable and decent life and the presence of adequate and efficient infrastructural amenities in a nation determines the standard of living of its residents. Countries that have modern day infrastructural amenities such as adequate and steady power supply, good education, contemporary legislative reforms, efficient property regulation system, transparent electoral processes, progressive trade policies, security, upright regulatory environment, efficient transport system, effective judicial system, industrial growth, access to good health care system, low level of unemployment and corruption as well as low poverty rate are considered to be developed nations while their counter parts that lack the above or have them but not at an advanced level are referred to as developing or under developed nations. Thus, the government of every country strives to provide the above amenities so as to improve the standard of living of its citizens as well as attain the respect associated with being a developed country. Inability to generate adequate funds can affect the level of infrastructural amenities provided by the government of a State (Adeosun, 2017). Thus, government is always saddled with the responsibility of providing the necessary infrastructure that will spur development as well as meet needs of the contemporary society such as the need to save time. Adegbie and Daniel-Adebayo, (2017). Developed countries around the world have invested substantially in infrastructural development over the centuries and still do, however, many of their developing counterparts in Asia and Africa have struggled with infrastructural challenges for decades and Nigeria is no exception.This lack of investment in infrastructure has given rise to a situation where the economy cannot encourage and sustain start-up businesses that can trigger a growth in the economy. Infrastructural development projects are classified into administration, economic services, social and community services and transfers. capital expenditure on administration, includes cost of ensuring internal and external security, capital expenditure on economic activities relates to investment in real infrastructure such as road, power, communication, housing and transportation. capital expenditure on social and community services relates to cost of providing a good health system, education and urbanization or rural areas and capital cost on transfers are incurred to

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“…Peralta-Alva et al (2018) found that in lowincome countries, value added tax (VAT) has the least efficiency costs but is highly regressive, while personal income tax (PIT) impacts the economy in the opposite way with corporate income tax (CIT) impacts staying in between. Alavuotunki, Haapanen, and Pirttil (2018) revealed that the revenue consequences of the VAT have not been positive, indicating that income-based inequality has increased due to the VAT adoption, whereas consumption inequality has remained unaffected.…”

Section: Literature Reviewmentioning

confidence: 99%

Tax counterbalancing in developing countries the case of Indonesia

Kuncoro¹

2019

AMP

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This research is devoted to test the feasibility of tax counterbalancing policy in developing country with focus on Indonesia. This research is motivated by the fact that the corporate income tax rate in Indonesia is relatively high compared to other south east Asian countries. The method uses the (quadratic) almost ideal demand system which has been widely used to analyze the demand system simultaneously. The estimation usesseemingly unrelated regression estimation approachwith quarterly data during the period of 2001-2016. The result presents that tax counterbalancing policy can be implemented in the short term. The reduction in corporation income tax rate imposed on the primary sectors can be substituted by the increase in tax rate in services sector. By removing informal sector, tax counterbalancing policy will potentially address not only the soundness of state budget but also promote the economic development. Eventually, fiscal policy could play an important role both in stimulation and stabilization in the long run.

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The Effects of the Value-Added Tax on Revenue and Inequality

Cited by 65 publications

References 34 publications

Value Added Tax and Economic Growth: An Empirical Study of China Perspective

Value Added Tax and Economic Growth: An Empirical Study of China Perspective

Value Added Tax Gap and Capital Expenditure over Economic Services in Nigeria

Tax counterbalancing in developing countries the case of Indonesia

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