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The value added tax: its causes and consequences
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Keen, Michael and Lockwood, Ben (2010) The value added tax: its causes and consequences. Journal of Development Economics, Vol.92 (No.2). pp. 138-151. doi:10.1016/j.jdeveco.2009.01.012 ISSN 0304-3878.
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Official URL: http://dx.doi.org/10.1016/j.jdeveco.2009.01.012
Abstract
This paper explores the causes and consequences of the remarkable rise of the value added tax (VAT), asking what has shaped its adoption and, in particular, whether it has proved an especially effective form of taxation. It is first shown that a tax innovation, such as the introduction of a VAT, reduces the marginal cost of public funds if and only if it also leads an optimizing government to increase the tax ratio. This leads to the estimation, on a panel of 143 countries for 25 years. of a system describing both the probability of VAT adoption and the revenue impact of the VAT. The results point to a rich set of determinants of VAT adoption, and to a significant but complex impact on the revenue ratio. The estimates suggest, very tentatively, that most countries which have adopted a VAT have thereby gained a more effective tax instrument, though this is less apparent in sub-Saharan Africa. (C) 2009 Elsevier B.V. All rights reserved.
Item Type: | Journal Article | ||||
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Subjects: | H Social Sciences > HC Economic History and Conditions | ||||
Divisions: | Faculty of Social Sciences > Economics | ||||
Journal or Publication Title: | Journal of Development Economics | ||||
Publisher: | Elsevier | ||||
ISSN: | 0304-3878 | ||||
Official Date: | July 2010 | ||||
Dates: |
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Volume: | Vol.92 | ||||
Number: | No.2 | ||||
Number of Pages: | 14 | ||||
Page Range: | pp. 138-151 | ||||
DOI: | 10.1016/j.jdeveco.2009.01.012 | ||||
Status: | Peer Reviewed | ||||
Publication Status: | Published | ||||
Access rights to Published version: | Restricted or Subscription Access |
Data sourced from Thomson Reuters' Web of Knowledge
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