The Value-Added Tax: Its Causes and Consequences

By Ben Lockwood, Michael Keen. Social Science Research Network, 2007

496 citations recorded by the source corpus.

Has the VAT proved, as its proponents claim, an especially effective form of taxation? To address this, this paper first shows 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 large panel, of a system of equations describing the probability of VAT adoption and the revenue impact of the VAT. The sign of the revenue impact is generally ambiguous, but most countries that have adopted a VAT seem to have gained a more effective tax instrument in doing so.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/9465e62b9fde870a881cefa272b8bc767c27327c

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Citations in the corpus

'Fiscal Devaluation' and Fiscal Consolidation: The VAT in Troubled Times (2012, background): “______, and Ben Lockwood, 2010, “The Value-added Tax: Its Causes and Consequences,” Journal of Development Economics, Vol. 92, pp. 138–51.”
The ICTD Government Revenue Dataset (2014, unknown): “This has in turn been reflected in the relatively rapid expansion of research, including extensive cross-country econometric research, exploring, among other areas: the connections between taxation, non-tax revenue and good governance (Ross 2004; Mahon 2005; Timmons 2005; Haber and Menaldo 2011; Bas”
Revenue Mobilization in Sub-Saharan Africa: Challenges from Globalization (2009, background): “36 The same has been true in other parts of the world see, for example, Keen and Simone (2004), and OECD (2001). however, that the efficiency gains often expected of the VAT have not been realized as clearly in Sub-Saharan Africa as elsewhere: Keen and Lockwood (2009).”