6533b82bfe1ef96bd128e0fd
RESEARCH PRODUCT
The Effects of the Value-Added Tax on Revenue and Inequality
Jukka PirttiläKaisa AlavuotunkiMika Haapanensubject
tulotinequalityInequalitymedia_common.quotation_subjectMonetary economicsDevelopmentarvonlisäveroGlobalizationEconomic inequalityrevenue0502 economics and businessEconomicsRevenue050207 economicsMacropanelvalue-addes tax050205 econometrics media_commonta51105 social sciences1. No povertyFixed effects modelComputingMilieux_GENERALValue-added taxeriarvoisuusGovernment revenue511 Economicsglobalizationincome inequalitydescription
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 country fixed effect regressions and instrumental variable analyses, where VAT adoption is instrumented using the previous values of neighbouring countries’ VAT systems as an instrument. The results reveal – in contrast to earlier work – that the revenue consequences of the VAT have not been positive. The results indicate that income-based inequality has increased due to the VAT adoption, whereas consumption inequality has remained unaffected. Peer reviewed
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2019-01-01 | Journal of Development Studies |