The heterogeneous effects of labor informality on VAT revenues: Evidence on a developed country

Di, Paolo; Sacchi, Agnese

doi:10.1016/j.jmacro.2020.103190

Cited by 8 publications

(7 citation statements)

References 55 publications

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“…Thus, following previous studies (Basu & Das, 2016; Crivelli et al, 2012), the 2SLS technique was adopted for the estimation. The first and second lags of output are used as instruments in the estimation (as in Bush, 2019; Di Caro & Sacchi, 2020). In drafting the data for estimating Equation (4), elasticities for the 37 countries in the three sub‐periods were pooled to obtain a total of 111 observations.…”

Section: Methodsmentioning

confidence: 99%

Macroeconomic policies and sustainable employment yields in sub‐Saharan Africa

Adegboye

2020

African Development Review

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The impact of macroeconomic policies on employment yields from output growth in sub-Saharan African countries is examined in this study. Data for 37 countries are used for the period 1991-2016 and sustainable employment yields are obtained by comparing employment elasticities for own-account (vulnerable) and employers (formal) groups. The two-stage least squares method is used to estimate employment elasticities for the panel datasets for three sub-periods (1991-1999, 2000-2009, 2010-2016), and the feasible generalised least squares method is used to estimate the effects of policies on employment elasticities based on a pooled dataset for the three sub-periods. Policy efforts are shown to be more effective if moved towards more flexible and targeted tax regimes, more rigid labour markets, and liberalised trade. On the other hand, investment and industrial policies do not appear to exert unidirectional effects on employment, especially given wide variations in government sizes and relative shares of domestic/foreign investment among the countries. There is also evidence that policy influences are more practicable with more formal employment groups. Patterns of macroeconomic policy directions are therefore critical to their effectiveness as labour market adjustment tools in the region.

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Section: Methodsmentioning

confidence: 99%

Macroeconomic policies and sustainable employment yields in sub‐Saharan Africa

Adegboye

2020

African Development Review

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“…Meanwhile, the research by Tagkalakis (2014) states that there is a negative correlation between the portion of food and non-alcoholic beverages in total household consumption and VAT revenues. Caro & Sacchi (2020) in a study conducted in Italy argued that the performance of VAT revenues was mainly due to the increase in public consumption, but this revenue could decrease along with the informality of the workforce. In line with research Arrachman & Qibthiyyah (2018) regarding the high informality of a country will reduce the flexibility of VAT revenues through the determination of tax rates.…”

Section: Empirical Researchmentioning

confidence: 99%

“…Omondi (2020), Caro & Sacchi, (2020) The higher the population, the higher the amount of household consumption expenditure which increases the VAT performance (Caro & Sacchi, 2020) Manufacturing Sector…”

Section: Control Variablesmentioning

confidence: 99%

Household consumption expenditures and the performance of provincial VAT revenue in Indonesia

Ari Setiyaningsih,

Khoirunurrofik

2022

SMBR

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<p>This study examines the relationship between household consumption expenditures and the performance of VAT revenue at the provincial level in Indonesia during 2011-2019. Household consumption is divided into food and non-food contests. The PPN performance indicator is shown by the PPN C-efficiency ratio which is calculated from the VAT revenue for each province divided by the VAT rate multiplied by the Consumption GRDP. The results of the regression using the fixed-effect panel data estimation model show a positive and significant relationship between household consumption and VAT revenue in the province. This means that increasing aggregate household consumption, both food and non-food consumption, will increase the VAT-C efficiency ratio. The results also show that an increase in the consumer price index that is not followed by an increase in income will decrease VAT performance. Furthermore, the increase in the share of the tertiary sector as a direction of structural transformation will weaken the performance of VAT receipts. This is possible because the tertiary sector is still dominated by the service sector which is not subject to VAT and the trade sector in which there is a high level of informality.</p>

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“…Meanwhile, economic factors such as the percentage of imports to GDP and the budget deficit have a negative effect on VAT revenues. Caro & Sacchi (2020) have also conducted research on VAT receipts in Italy and found that the informal sector has a negative effect on VAT receipts but sales to consumers have a positive effect on VAT receipts. Another study by Wijaya (2020) states that a single VAT rate results in more VAT receipts than VAT at a double rate.…”

Section: Introductionmentioning

confidence: 99%

Analysis of determinants of value added tax revenue in Asia

Permadi¹,

Wijaya²

2022

JPPI

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This study aims to obtain empirical evidence of factors that influence VAT receipts from various aspects, including the VAT rate itself, economic factors, tax administration factors, and legal factors. The VAT rate factor is explained by the standard rate and implicit rate variables. Economic factors are explained by the variables of imports, the service sector, and the fiscal deficit. Administrative factors are explained by the variable c-efficiency and government effectiveness. The legal factor is explained by the variables of controlling corruption and law enforcement. This study uses secondary data with the object of research being countries in the Asian continent from 2015 to 2019. The sample countries were selected with certain considerations so that 19 sample countries were obtained. The results of this study indicate that implicit tariffs, the service sector, and government effectiveness have a significant positive effect on VAT receipts, while imports have a significant negative effect on VAT receipts. Meanwhile, standard rates, fiscal deficits, c-efficiency, corruption control, and the rule of law have no significant effect on VAT revenues.

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The heterogeneous effects of labor informality on VAT revenues: Evidence on a developed country

Cited by 8 publications

References 55 publications

Macroeconomic policies and sustainable employment yields in sub‐Saharan Africa

Macroeconomic policies and sustainable employment yields in sub‐Saharan Africa

Household consumption expenditures and the performance of provincial VAT revenue in Indonesia

Analysis of determinants of value added tax revenue in Asia

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