The value added tax: Its causes and consequences

Keen, Michael; Lockwood, Ben

doi:10.1016/j.jdeveco.2009.01.012

“…Therefore, our findings contribute to the well established agenda studying the implemented fiscal policy in developing countries and examining potential differences between developing and developed countries concerning this issue (see e.g. Persson and Tabellini, 2003;Kenny and Winer, 2006;Keen and Lockwood, 2010). Moreover, our findings could also be related to the literature that examine the effects of alternative political regimes on implemented policies (see e.g.…”

Section: Discussionsupporting

confidence: 62%

Income inequality and the tax structure: Evidence from developed and developing countries

Adam

¹

,

Kammas

²

,

Λαπατίνας

³

2015

Journal of Comparative Economics

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This paper seeks to examine the effect of income inequality on the structure of tax policies. We first use a simplified theoretical framework which allows us to formalize the testable implications of the relevant literature. Subsequently, our analysis indicates that more unequal economies rely heavier on capital relative to labor income taxation. This relationship remains robust across various alternative measures of income inequality and most importantly through alternative political regimes. In addition, our analysis places the spotlight on the potential reverse causality between income inequality and structure of the tax policies and seeks to address it by making use of the most appropriate data and techniques. JEL: H10, H23, H26

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“…The most notable exception is the United States, which is the only OECD country without a value added tax. Keen and Lockwood (2010) study why countries adopt a VAT. According to their results, the importance of the agricultural sector, the number of countries in the neighborhood that already have a VAT, participation in IMF programs, and adverse revenue shocks are positively related to the likelihood that a country introduces a value added tax.…”

Section: Vats and Aras As Tax Innovationsmentioning

confidence: 99%

“…7 Also known as semi-autonomous revenue authorities or simply as revenue authorities. I am not aware of a study analyzing the causes and consequences of the adoption of an ARA that is as comprehensive as the one by Keen and Lockwood (2010) for the VAT. There is, however, some evidence available from disparate sources.…”

Section: Vats and Aras As Tax Innovationsmentioning

confidence: 99%

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Taxation and Democratization

Baskaran

¹

2013

SSRN Journal

0

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may TAXATION AND DEMOCRATIZATION Thushyanthan Baskaran Taxation and democratizationThushyanthan Baskaran * Department of Economics University of Goettingen AbstractAnecdotal evidence from pre-modern Europe and North America suggests that rulers are forced to become more democratic once they impose a significant fiscal burden on their citizens. One difficulty in testing this "taxation causes democratization" hypothesis empirically is the endogeneity of public revenues. I use introductions of value added taxes and autonomous revenue authorities as sources of quasi-exogenous variation to identify the causal effect of the fiscal burden borne by citizens on democracy. The instrumental variables regressions with a panel of 122 countries over the period suggest that revenues had on average a mild positive effect on democracy.

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“…The Costa Rican and Pakistani notch-based systems are, of 3 The consequences of the VAT systems in developing countries has been a topic of great interest. Theoretical modeling include Emran and Stiglitz (2005) and Keen (2008), whereas empirical assessment using macrodata are provided by Keen and Lockwood (2010) and Alavuotunki and Pirttilä (2015). course, highly interesting, but since the systems are so uncommon, the external relevance of that research for other developing countries may not be that great.…”

Section: Introductionmentioning

confidence: 99%

How Do Small Firms Respond to Tax Schedule Discontinuities? Evidence from South African Tax Registers

Boonzaaier

¹

,

Harju

²

,

Matikka

³

et al. 2017

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This study has been prepared within the UNU-WIDER project on 'Firm-and Industry-level Analysis in South Africa', which is part of a larger research project on 'Regional Growth and Development in Southern Africa'. Terms of use: Documents in Copyright © UNU-WIDER 2016Information and requests: publications@wider.unu.edu ISSN 1798-7237 ISBN 978-92-9256-079-9 Typescript prepared by the Authors.The United Nations University World Institute for Development Economics Research provides economic analysis and policy advice with the aim of promoting sustainable and equitable development. The Institute began operations in 1985 in Helsinki, Finland, as the first research and training centre of the United Nations University. Today it is a unique blend of think tank, research institute, and UN agency-providing a range of services from policy advice to governments as well as freely available original research.UNU-WIDER acknowledges specific programme contribution from the National Treasury of South Africa to its project 'Regional Growth and Development in Southern Africa' and core financial support to its work programme from the governments of Denmark, Finland, Sweden, and the United Kingdom. Katajanokanlaituri 6 B, 00160 Helsinki, FinlandThe views expressed in this paper are those of the author(s), and do not necessarily reflect the views of the Institute or the United Nations University, nor the programme/project donors. Abstract:In this paper we study the effects of various tax schedule discontinuities on the behavior of small firms using high-quality and population-wide tax register data from South Africa. We use the bunching method to analyse how these discontinuities affect the firm-size distribution. We first examine how the value-added tax threshold affects the sales distribution of firms. We also study the effects of two separate corporate income tax rate kinks. We find sizable bunching at each of these thresholds. The elasticity estimates for the corporate tax kink points are large, ranging from 0.7 to 1.6, whereas the elasticity of the value added is below 0.1. We find some suggestive evidence that part of the response is driven by tax evasion.

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The value added tax: Its causes and consequences

Abstract: This Working Paper should not be reported as representing the views of the IMF.

Cited by 314 publications

References 21 publications

Income inequality and the tax structure: Evidence from developed and developing countries

Income inequality and the tax structure: Evidence from developed and developing countries

Taxation and Democratization

How Do Small Firms Respond to Tax Schedule Discontinuities? Evidence from South African Tax Registers

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