COUNTERCYCLICAL TAX CHANGES AND CONSUMERS’ EXPENDITURE^*

Fiscal Stabilisation and Emu

“…More information on the changeover was provided in the 1972 Budget, which gave some indication as to how VAT rates would differ from the previous rates pertaining under purchase tax. Sumner and Laing (1981) tried to estimate the impact of the move from purchase tax to VAT on consumption. They found 'abundant' evidence that the expectation of tax changes altered purchase patterns substantially.…”