IDEAS home Printed from https://ideas.repec.org/a/bla/ecinqu/v58y2020i1p225-240.html
   My bibliography  Save this article

Does The Vat Tax Exports?

Author

Listed:
  • Rishi R. Sharma

Abstract

While a VAT should in principle be neutral with respect to international trade, it may in practice function as a tax on exporters' input purchases if firms receive incomplete VAT refunds. Using data for over 100 countries that span the majority of historical VAT adoption episodes, this paper finds that—consistent with this hypothesis—the VAT reduces the exports of an industry with a 10 percentage point higher intermediate goods share of output by over 8% relative to an industry with a lower share. This effect is driven by developing countries and is absent for high‐income countries. (JEL F13, F14, H25, H87, O11)

Suggested Citation

  • Rishi R. Sharma, 2020. "Does The Vat Tax Exports?," Economic Inquiry, Western Economic Association International, vol. 58(1), pages 225-240, January.
    • Handle: RePEc:bla:ecinqu:v:58:y:2020:i:1:p:225-240
    DOI: 10.1111/ecin.12830
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/ecin.12830
    Download Restriction: no
    File URL: https://libkey.io/10.1111/ecin.12830?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Klotz, Richard & Sharma, Rishi R., 2023. "Trade barriers and CO2," Journal of International Economics, Elsevier, vol. 141(C).
    2. Lu, Angdi & Zhang, Jiang & Li, Jie, 2023. "The impact of export VAT rebate reduction on firms' pollution emissions: Evidence from Chinese enterprises," Energy Economics, Elsevier, vol. 120(C).
    3. Cai, Jie & Stoyanov, Andrey, 2023. "Progressive income tax and comparative advantage in trade," Economic Modelling, Elsevier, vol. 129(C).

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecinqu:v:58:y:2020:i:1:p:225-240. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/weaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.