IDEAS home Printed from https://ideas.repec.org/p/zbw/kondp2/149.html
   My bibliography  Save this paper

Value-added taxation in the EC after 1992: Some applied general equilibrium calculations

Author

Listed:
  • Fehr, Hans
  • Rosenberg, Christoph B.
  • Wiegard, Wolfgang

Abstract

This paper examines the quantitative effects of the transitional system of value-added taxation for intra-EC trade after 1992, as recently adopted by the ECOFIN-Council. First, the administration of the current destination principle and the interim solution are described and a mathematical formalization is provided. A short representation of the empirical general equilibrium model featuring seven EC regions and 14 production sectors follows. Finally, the effects of a switch to the transitional system are examined theoretically and by using policy simulations. When decomposing welfare effects, international tax revenue shifts prove to dominate, while substitution effects have relatively little influence on economic welfare. A generous arrangement with regard to long distance shopping, opening tax arbitrage possibilities to final consumers, favours low tax countries at the cost of their EC partners.

Suggested Citation

  • Fehr, Hans & Rosenberg, Christoph B. & Wiegard, Wolfgang, 1991. "Value-added taxation in the EC after 1992: Some applied general equilibrium calculations," Discussion Papers, Series II 149, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    • Handle: RePEc:zbw:kondp2:149
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/101721/1/737082208.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Symons, Elizabeth & Walker, Ian, 1989. "The Revenue and Welfare Effects of Fiscal Harmonization for the UK," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 5(2), pages 61-75, Summer.
    2. Bhatia, Kul B., 1982. "Value-added tax and the theory of tax incidence," Journal of Public Economics, Elsevier, vol. 19(2), pages 203-223, November.
    3. Hamilton, Bob & Whalley, John, 1986. "Border tax adjustments and U.S. trade," Journal of International Economics, Elsevier, vol. 20(3-4), pages 377-383, May.
    4. Rüdiger Parsche, 1990. "Umsatzsteuer und Sonderverbrauchsteuern im EG-Binnenmarkt ab 1993 : die steuerrechtliche und technische Abwicklung des innergemeinschaftlichen Warenverkehrs," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 43(33), pages 05-06, October.
    5. Boadway, Robin W, 1974. "The Welfare Foundations of Cost-Benefit Analysis," Economic Journal, Royal Economic Society, vol. 84(336), pages 926-939, December.
    6. Bhatia, Kul B., 1988. "Tax incidence in a hierarchical model," Journal of Public Economics, Elsevier, vol. 37(2), pages 221-242, November.
    7. 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, vol. 32(2-3), pages 334-342, March.
    8. Charles L. Ballard & John Karl Scholz & John B. Shoven, 1987. "The Value-Added Tax: A General Equilibrium Look at Its Efficiency and Incidence," NBER Chapters, in: The Effects of Taxation on Capital Accumulation, pages 445-480, National Bureau of Economic Research, Inc.
    9. Whalley, John, 1976. "Some general equilibrium analysis applied to fiscal harmonization in the European community," European Economic Review, Elsevier, vol. 8(3), pages 291-312, October.
    10. Vandendorpe, Adolf L., 1972. "Optimal tax structures in a model with traded and non-traded goods," Journal of International Economics, Elsevier, vol. 2(3), pages 235-256, August.
    11. Norman, Victor D., 1990. "Assessing trade and welfare effects of trade liberalization : A comparison of alternative approaches to CGE modelling with imperfect competition," European Economic Review, Elsevier, vol. 34(4), pages 725-745, June.
    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


    Cited by:

    1. Haufler, Andreas, 1991. "Alternative tax principles for the European Community: A computable general equilibrium comparison," Discussion Papers, Series II 151, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    2. Boss, Alfred, 1999. "Do we need tax harmonization in the EU?," Kiel Working Papers 916, Kiel Institute for the World Economy (IfW Kiel).
    3. Plassmann, Florenz, 2005. "The advantage of avoiding the Armington assumption in multi-region models," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 777-794, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Haufler, Andreas, 1991. "Alternative tax principles for the European Community: A computable general equilibrium comparison," Discussion Papers, Series II 151, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    2. Giesecke, James A. & Nhi, Tran Hoang, 2010. "Modelling value-added tax in the presence of multi-production and differentiated exemptions," Journal of Asian Economics, Elsevier, vol. 21(2), pages 156-173, April.
    3. Jason Nassios & James Giesecke, 2022. "Property Tax Reform: Implications for Housing Prices and Economic Productivity," Centre of Policy Studies/IMPACT Centre Working Papers g-330, Victoria University, Centre of Policy Studies/IMPACT Centre.
    4. Antonio Gómez Gómez-Plana & Pedro Pascual Arzoz, 2011. "Fraude fiscal e IVA en España: incidencia en un modelo de equilibrio general," Hacienda Pública Española / Review of Public Economics, IEF, vol. 199(4), pages 9-52, December.
    5. Kono, Tatsuhito & Kishi, Akio, 2018. "What is an appropriate welfare measure for efficiency of local public policies inducing migration?," Mathematical Social Sciences, Elsevier, vol. 91(C), pages 25-35.
    6. Ana-Isabel Guerra & Laura Varela-Candamio & Jesús López-Rodríguez, 2022. "Tax reforms in Spain: efficiency levels and distributional patterns," Economic Systems Research, Taylor & Francis Journals, vol. 34(1), pages 41-68, January.
    7. Edward J. Balistreri & Daniel T. Kaffine & Hidemichi Yonezawa, 2019. "Optimal Environmental Border Adjustments Under the General Agreement on Tariffs and Trade," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(3), pages 1037-1075, November.
    8. Udo Ebert, 1986. "Equity and distribution in cost-benefit analysis," Journal of Economics, Springer, vol. 5(1), pages 67-78, December.
    9. Aleksandar Vasilev, 2017. "VAT Evasion in Bulgaria: A General-Equilibrium Approach," Review of Economics and Institutions, Università di Perugia, vol. 8(2).
    10. Lawrence H. Goulder, 1992. "Do the Costs of a Carbon Tax Vanish When Interactions With Other Taxes are Accounted For?," NBER Working Papers 4061, National Bureau of Economic Research, Inc.
    11. Céline DE QUATREBARBES & Luc SAVARD & Dorothée BOCCANFUSO, 2011. "Can the removal of VAT Exemptions support the Poor? The Case of Niger," Working Papers 201106, CERDI.
    12. Glebe, Thilo W., 2011. "Welfare economics of agricultural trade liberalisation and strategic environmental policy," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 8(2).
    13. Daniel Piazalo, 2000. "Poland's Membership in the European Union: An Analysis with a Dynamic Computable General Equilibrium (CGE) Model," LICOS Discussion Papers 8900, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    14. Celine de Quatrebarbes & Bertrand Laporte & Stéphane Calipel, 2021. "Fighting the soaring prices of agricultural food products. VAT versus Trade tariffs exemptions in a context of imperfect competition in Niger : CGE and micro-simulation approach," CERDI Working papers hal-03138369, HAL.
    15. Joanna Pomaskow, 2015. "The importance of law and economics in the contemporary economic reality," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 14(2), pages 233-241, June.
    16. Gilbert E. Metcalf, 1994. "Life Cycle versus Annual Perspectives on the Incidence of a Value Added Tax," NBER Chapters, in: Tax Policy and the Economy, Volume 8, pages 45-64, National Bureau of Economic Research, Inc.
    17. Li, Jennifer Chung-I, 2003. "A Dynamic Recursive Analysis of A Carbon Tax Including Local Health Feedback," Conference papers 331085, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    18. Claudio Agostini, 2016. "Small Firms and Presumptive Tax Regimes in Chile: Tax Avoidance and Equity," Working Papers wp_049, Adolfo Ibáñez University, School of Government.
    19. Caspersen, Erik & Metcalf, Gilbert E., 1994. "Is a Value Added Tax Regressive? Annual Versus Lifetime Incidence Measures," National Tax Journal, National Tax Association;National Tax Journal, vol. 47(4), pages 731-746, December.
    20. Nurmi, Väinö & Ahtiainen, Heini, 2018. "Distributional Weights in Environmental Valuation and Cost-benefit Analysis: Theory and Practice," Ecological Economics, Elsevier, vol. 150(C), pages 217-228.

    More about this item

    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:zbw:kondp2:149. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc 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 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/fwkonde.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.