The Effects of the Value-Added Tax on Revenue and Inequality
Abstract
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.
Main Authors
Format
Articles
Research article
Published
2019
Series
Subjects
Publication in research information system
Publisher
Taylor & Francis
The permanent address of the publication
https://urn.fi/URN:NBN:fi:jyu-201901081109Use this for linking
Review status
Peer reviewed
ISSN
0022-0388
DOI
https://doi.org/10.1080/00220388.2017.1400015
Language
English
Published in
Journal of Development Studies
Citation
- Alavuotunki, K., Haapanen, M., & Pirttilä, J. (2019). The Effects of the Value-Added Tax on Revenue and Inequality. Journal of Development Studies, 55(4), 490-508. https://doi.org/10.1080/00220388.2017.1400015
License
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