Welfare effects of VAT reforms: a general equilibrium analysis

Bye, Brita; Strøm, Birger; Åvitsland, Turid

doi:10.1007/s10797-011-9193-9

Cited by 26 publications

(19 citation statements)

References 21 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…They can be divided into two categories: general equilibrium analysis and reduced-form analysis. 7 All of the general equilibrium studies use data from high-income countries such as the United States (Ballard, Scholz, and Shoven 1987), Canada (Piggott and Whalley 2001), Germany (Boeters et al 2010), and Norway (Bye, Strom, and Avitsland 2012). They find a positive impact of an "idea l" VAT on economic efficiency and other macroeconomic variables.…”

Section: Related Literaturementioning

confidence: 99%

“…However, once they incorporate imperfections found in real‐world VATs in their model, the efficiency gains achieved by adopting a VAT significantly decreases. For instance, Bye, Strom, and Avitsland () find that including selective services in the VAT base reduces welfare compared to not including services in the VAT base or including all services in the VAT base. Ballard, Scholz, and Shoven () estimate that if the United States introduces a VAT similar to those found in the European countries, it reduces the efficiency gains by 50% to 70% compared to a broad‐based and single‐rate VAT.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Does a Value‐added Tax Increase Economic Efficiency?

Adhikari

2019

Economic Inquiry

View full text Add to dashboard Cite

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)

show abstract

Section: Related Literaturementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Does a Value‐added Tax Increase Economic Efficiency?

Adhikari

2019

Economic Inquiry

View full text Add to dashboard Cite

show abstract

“…The implementation of VAT is highly dependent on its mechanisms and the process though which it is implemented. Brita Bye, Birger Strøm, and Turid Åvitland (2012) provide evidence to support this notion where they observe that in Norway, an imperfect extension of the VAT leads to economic losses as opposed to the general and uniform VAT that covers all goods and services. VAT may result in reduction of the amount of goods and services consumed, even if spending remains unchanged.…”

Section: Literature Review 21 Vat and Efficiencymentioning

confidence: 97%

Value-added tax and economic efficiency: Role of country governance

2021

View full text Add to dashboard Cite

This paper examines the impact of VAT on economic efficiency, which while regarded as distortionary remains inevitable for economic development. Using data from 115 countries from 1984 to 2014, this research further investigates the moderating role of country governance on the link between VAT and economic efficiency. The results suggest that the extent to which country governance mitigates the effect of VAT on economic efficiency is contingent upon the way the country groups prioritize the development of each institutional factor. We find that high corporate tax countries benefit more from higher quality country governance. These findings confirm the role of country governance in better enforcement of tax policy to create less detrimental effects for economic growth. Therefore, better country governance makes taxation more affordable in high corporate tax countries.

show abstract

“…Anyway, Bye, Strom and Avitsland (2012) found by the research carried out in Norway that general and uniform VAT system covering all goods and services without exemptions is welfare superior to current and former non general and non-uniform Norwegian system. Similar results were obtained by Buettner and Erbe (2014) when they quantified the estimates of the effects of repealing the VAT exemption of financial services in Germany.…”

Section: Introductionmentioning

confidence: 93%

Labour-Intensive Services and Changes in Value Added Tax Revenue

Krzikallová¹,

Střílková²

2016

JOC

View full text Add to dashboard Cite

VAT rates have gradually become an important fiscal policy tool of of EU member states. This paper quantifies the influence on the VAT revenue of the potential transfer of selected labour intensive services from the standard to a reduced VAT rate in the Czech Republic. The data used for the analysis were obtained by a questionnaire, as well as through research performed at the General Financial Directorate and the Czech Statistical Office. To analyze the data, a comparison analysis and descriptive statistical methods were used. The change in VAT rate would cause a decrease in VAT revenue up to 1.6 billion CZK per year, but it would also bring positive effects, especially in the business development of the suppliers of labor intensive services. It could also prevent a price increase during the planned introduction of the e-sales system in restaurants.

show abstract

Welfare effects of VAT reforms: a general equilibrium analysis

Cited by 26 publications

References 21 publications

Does a Value‐added Tax Increase Economic Efficiency?

Does a Value‐added Tax Increase Economic Efficiency?

Value-added tax and economic efficiency: Role of country governance

Labour-Intensive Services and Changes in Value Added Tax Revenue

Contact Info

Product

Resources

About