IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Aspects of Interjurisdictional Sharing of the Value-Added Tax

Listed author(s):
  • Howell H. Zee

    (International Monetary Fund)

The sharing of consumption taxes between different levels of government has come to the fore in a number of developing countries in recent years with respect to the VAT. Employing a simple model that abstracts from considerations of equalization transfers and complications of tax competition, this article inquires about the determinants of an optimal arrangement for interjurisdictional sharing of the VAT base and revenue, and derives explicit solutions for the optimal central and local VAT rates, as well as the optimal revenue-sharing ratio between central and local governments on a derivation basis. The central finding is that an optimal VAT sharing arrangement is generally characterized by the simultaneous sharing of the VAT base and of the VAT revenue. The nature of the optimal solutions is shown to depend on the interactions among interjurisdictional differences in population, income, and the level of local government expenditure relative to local tax base.

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:
Download Restriction: no

Article provided by in its journal Public Finance Review.

Volume (Year): 36 (2008)
Issue (Month): 2 (March)
Pages: 147-168

in new window

Handle: RePEc:sae:pubfin:v:36:y:2008:i:2:p:147-168
Contact details of provider:

No references listed on IDEAS
You can help add them by filling out this form.

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

When requesting a correction, please mention this item's handle: RePEc:sae:pubfin:v:36:y:2008:i:2:p:147-168. 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: (SAGE Publications)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.