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This paper provides empirical evidence on a novel complementarity between VAT and trade taxes. Downstream domestic firms require VAT receipts from importers to claim VAT on purchases, increasing incentives for honest reporting of imports. Trade gap, the difference between mirror and domestic trade reports in Iran at 6-digit HS disaggregation, is used to measure this complementarity. Iran introduced VAT in 2008 and, since then, has increased its rate from 3 to 9 percent. Difference-in-differences estimates show that a 1 percentage point increase in the VAT rate reduces the trade gap by about 2 percent. Consistent with the compliance mechanisms for VAT, a smaller effect for consumer products that have a shorter value chain is observed. Findings suggest that replacing tariffs with VAT results in a double dividend. Tax revenue might increase due to better tariff compliance and a broader VAT base.

COVID-19 has impacted all human beings, but more severely people with baseline vulnerabilities, and especially women. The impact is even more pronounced in developing countries where gender gap bias is more acute. We use the national data set of the Labor Force Survey, from 2015 to summer 2020, to assess the heterogeneous impacts of the downturn on the employment of women in Iran. Findings show that women have disproportionately exited the labor market, which widens the gender gap in the participation rate. They also show a slower recovery for women compared to men. In contrast, when remaining in the labor market women’s working hours are less affected than men’s. Overall, our findings show a heterogeneous effect from the pandemic among women regarding their education level, age, and occupational choices.