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VIVAT, CVAT and All That

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  • Michael Keen

Abstract

Conventional wisdom has it that the value-added tax is not a suitable instrument for lower-level jurisdictions (‘provinces’) in a federal system. The problems that arise when it is so used have become a serious constraint on the development of the VAT—and closer economic integration—in Brazil, the EU, India and elsewhere. This paper describes and compares two recent proposals for forms of VAT intended to alleviate these difficulties: the VIVAT and the CVAT. Both enable the VAT chain to be preserved on inter-provincial trade without compromising the destination principle (allowing provinces to tax consumption at different rates) or introducing new scope for game-playing by the provinces. The key difference between them is that the CVAT requires sellers to discriminate between buyers located in different provinces of the federation, whereas VIVAT requires them to discriminate between registered and non-registered buyers. Where the balance of advantage between the two lies is not entirely obvious.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 00/83.

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Length: 19
Date of creation: 01 Apr 2000
Date of revision:
Handle: RePEc:imf:imfwpa:00/83

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Related research

Keywords: Tax systems; Value added tax; vat; tax administrations; federal tax; sales tax; tax administration; sales taxes; tax coordination; retail sales tax; rate of tax; tax authorities; provincial sales taxes; national tax journal; tax journal; central tax; tax collection; indirect taxes; international tax; tax reform; subnational taxes; vat system; intergovernmental fiscal relations; national tax administration; tax system; state tax; international taxation; indirect tax; state sales taxation; revenue collection; value added taxes; sales tax system; internet; tax harmonization; tax assignment; tax competition; tax treatment; sales taxation;

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Citations

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Cited by:
  1. Silvia Fedeli & Francesco Forte, 2012. "Border Tax Adjustment without Borders: The EU Carousel of VAT Fraud," Review of Economics & Finance, Better Advances Press, Canada, vol. 2, pages 55-70, November.
  2. World Bank, 2003. "Argentina : Reforming Policies and Institutions for Efficiency and Equity of Public Expenditures," World Bank Other Operational Studies 14637, The World Bank.
  3. Santiago Lago Peñas & Jorge Martínez Vázquez, 2010. "La descentralización tributaria en las Comunidades Autónomas de régimen común: un proceso inacabado," Hacienda Pública Española, IEF, IEF, vol. 192(1), pages 129-151, March.
  4. Joao do Carmo Oliveira & Jorge Martinez-Vasquez, 2001. "Czech Republic : Intergovernmental Fiscal Relations in the Transition," World Bank Publications, The World Bank, number 14027, August.
  5. Ligthart, J.E., 2004. "Consumption taxation in a digital world: A primer," Open Access publications from Tilburg University urn:nbn:nl:ui:12-140922, Tilburg University.
  6. Jorge Martinez-Vazquez, 2007. "Revenue Assignments in the Practice of Fiscal Decentralization," International Center for Public Policy Working Paper Series, at AYSPS, GSU, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University paper0709, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  7. Bernd Genser, 2002. "Coordinating VATs Between EU Member States," CESifo Working Paper Series 648, CESifo Group Munich.
  8. José Sánchez Maldonado & Salvador Gómez Sala, 2006. "The Reform of Indirect Taxation in Spain: VAT and Excise," International Center for Public Policy Working Paper Series, at AYSPS, GSU, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University paper0607, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  9. Richard M. Bird, 2013. "Below the Salt: Decentralizing Value-Added Taxes," International Center for Public Policy Working Paper Series, at AYSPS, GSU, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University paper1302, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  10. Jorge Martinez-Vazquez & Cristian Sepúlveda, 2008. "The Municipal Transfer System in Nicaragua: Evaluation and Proposals for Reform," International Center for Public Policy Working Paper Series, at AYSPS, GSU, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University paper0801, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  11. Richard M. Bird & Pierre-Pascal Gendron, 2001. "VATs in Federal States: Experiences and Emerging Possibilities," International Center for Public Policy Working Paper Series, at AYSPS, GSU, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University paper0104, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  12. Richard Bird & Pierre-Pascal Gendron, 2000. "CVAT, VIVAT, and Dual VAT: Vertical ``Sharing'' and Interstate Trade," International Tax and Public Finance, Springer, Springer, vol. 7(6), pages 753-761, December.

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