Advanced Search
MyIDEAS: Login to save this paper or follow this series

Modelling Value-Added Tax in the Presence of Multiproduction and Differentiated Exemptions

Contents:

Author Info

  • James Giesecke
  • Nhi Hoang Tran

Abstract

We develop a framework for economy-wide modelling of value-added tax systems. Our framework models a number of complexities of VAT systems as they are implemented by tax agencies. In particular, we model multiple rates, multiple exemptions, multiple degrees of refundability across commodity users, and multi-product enterprises. A detailed VAT framework, such as that which we present in this paper, is important for correct modelling of VAT within a general equilibrium model. Such a framework is also of value in correctly calculating the distribution of indirect tax payments in CGE model databases, a prerequisite of accurate welfare impact calculations. We use the model to analyse the effects of simplifying Vietnam's complex VAT system. We simplify the system by moving from three tax rates to one budget-neutral rate, while also removing many discretionary exemptions. We find that the policy lifts real private consumption spending, our welfare measure, by an average of 0.9 per cent over our simulation period, 2008-2018.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.copsmodels.com/ftp/workpapr/g-182.pdf
File Function: Initial version, 2009-02
Download Restriction: no

File URL: http://www.copsmodels.com/elecpapr/g-182.htm
File Function: Local abstract: may link to additional material.
Download Restriction: no

Bibliographic Info

Paper provided by Victoria University, Centre of Policy Studies/IMPACT Centre in its series Centre of Policy Studies/IMPACT Centre Working Papers with number g-182.

as in new window
Length:
Date of creation: Feb 2009
Date of revision:
Publication status: Published in Journal of Asian Economics, 2010, Vol. 21(2), pp. 156-173.
Handle: RePEc:cop:wpaper:g-182

Contact details of provider:
Postal: PO Box 14428, Melbourne, Victoria, 8001
Phone: 03 9919 1877
Web page: http://www.copsmodels.com/about.htm
More information through EDIRC

Related research

Keywords: value added tax; dynamic CGE model; Vietnam; indirect tax reform;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Dixon, Peter B. & Parmenter, B. R. & Powell, Alan A., 1984. "The role of miniatures in computable general equilibrium modelling : Experience from ORANI," Economic Modelling, Elsevier, Elsevier, vol. 1(4), pages 421-428, October.
  2. Sijbren Cnossen, 1998. "Global Trends and Issues in Value Added Taxation," International Tax and Public Finance, Springer, Springer, vol. 5(3), pages 399-428, July.
  3. Binh Tran-Nam, 2001. "Use and Misuse of Tax Compliance Costs in Evaluating the GST," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 34(3), pages 279-290.
  4. Bird,Richard & Gendron,Pierre-Pascal, 2011. "The VAT in Developing and Transitional Countries," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9781107401440.
  5. Charles Ballard & John Karl Scholz & John B. Shoven, 1987. "The Value-added Tax: A General Equilibrium Look at Its Efficiency and Incidence," NBER Chapters, National Bureau of Economic Research, Inc, in: Taxes and Capital Formation, pages 105-108 National Bureau of Economic Research, Inc.
  6. Don Fullerton & Yolanda K. Henderson & John B. Shoven, 1982. "A Comparison of Methodologies in Empirical General Equilibrium Models of Taxation," NBER Working Papers, National Bureau of Economic Research, Inc 0911, National Bureau of Economic Research, Inc.
  7. Harrison, W Jill & Pearson, K R, 1996. "Computing Solutions for Large General Equilibrium Models Using GEMPACK," Computational Economics, Society for Computational Economics, Society for Computational Economics, vol. 9(2), pages 83-127, May.
  8. Stephen Marks, 2005. "Proposed changes to the value added tax: implications for tax revenue and price distortions," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 41(1), pages 81-95.
  9. Toh, Mun-Heng & Lin, Qian, 2005. "An evaluation of the 1994 tax reform in China using a general equilibrium model," China Economic Review, Elsevier, Elsevier, vol. 16(3), pages 246-270.
  10. International Monetary Fund, 2007. "Vietnam," IMF Staff Country Reports, International Monetary Fund 07/386, International Monetary Fund.
  11. Peter B. Dixon & Maureen T. Rimmer, 1999. "Changes in Indirect Taxes in Australia: A Dynamic General Equilibrium Analysis," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 32(4), pages 327-348.
  12. Kehoe, Timothy J. & Noyola, Pedro Javier & Manresa, Antonio & Polo, Clemente & Sancho, Ferran, 1988. "A general equilibrium analysis of the 1986 tax reform in Spain," European Economic Review, Elsevier, Elsevier, vol. 32(2-3), pages 334-342, March.
  13. Gottfried, Peter & Wiegard, Wolfgang, 1991. "Exemption versus zero rating : A hidden problem of VAT," Journal of Public Economics, Elsevier, Elsevier, vol. 46(3), pages 307-328, December.
Full references (including those not matched with items on IDEAS)

Citations

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

Cited by:
  1. Helmut Dietl & Christian Jaag & Markus Lang & Urs Trinkner, 2010. "Competition and Welfare Effects of VAT Exemptions," Working Papers, Swiss Economics 0024, Swiss Economics, revised Oct 2010.
  2. repec:rej:journl:v:15:y:2012:i:45:p:143-170 is not listed on IDEAS
  3. M.J. Mariano & J.A. Giesecke & N.H. Tran, 2014. "The Effects of Domestic Rice Market Interventions Outside Business-As-Usual Conditions For Imported Rice Prices," Centre of Policy Studies/IMPACT Centre Working Papers, Victoria University, Centre of Policy Studies/IMPACT Centre g-245, Victoria University, Centre of Policy Studies/IMPACT Centre.
  4. Céline de Quatrebarbes & Savard Luc & Boccanfuso Dorothée, 2011. "Can the suppression of VAT exemption support the poor? The case of Niger," EcoMod2011, EcoMod 3227, EcoMod.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cop:wpaper:g-182. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Horridge).

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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