The reduced VAT rate for small business in Croatia
AbstractThis paper assesses the potential effects of introduction of the reduced VAT rate for small business, based on the EU VAT legislation development. The analysis includes effects on prices, sales, shadow economy and employment. It starts with the assumption of no substantial effect. Survey for Croatia is done by small business owners’ interviews and encompasses descriptive and inferential statistics based on parametric tests. The EU expected existence of a link between VAT reduction, price reduction, sales increase and positive effects on employment (as well as decline in the shadow economy) is proved even in this research. However, the pass-through to prices is very moderate as well as other effects. The reduced VAT rate could have some positive results for the restaurants and bars only. There exists also some possibility for construction of housing and construction services related to housing as well as some other labour intensive services.
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Bibliographic InfoArticle provided by University of Rijeka, Faculty of Economics in its journal Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics.
Volume (Year): 27 (2009)
Issue (Month): 1 ()
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Web page: https://www.efri.uniri.hr/en/proceedings
More information through EDIRC
public finance; small business; reduced VAT rates; efficiency; Croatia;
Find related papers by JEL classification:
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
- G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul Baker & Vanessa Brechling, 1992. "The impact of excise duty changes on retail prices in the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 13(2), pages 48-65, January.
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