IDEAS home Printed from https://ideas.repec.org/p/ags/ufvdwp/53440.html
   My bibliography  Save this paper

Economic Impacts of Brazilian Indirect Tax Reduction: An analysis of the competitiveness within MERCOEURO

Author

Listed:
  • Pereira, Matheus Wemerson Gomes
  • Teixeira, Erly Cardoso

Abstract

The objective of this paper is to determine the effects of the creation of MERCOEURO stemming from an indirect tax reduction in the Brazilian economy. Four different scenarios were analyzed taking into account the elimination of tariffs on imports among the member countries in the MERCOEURO agreement and a 10% reduction in the indirect taxes on the final consumption, on intermediary inputs, and on sectors production. Simulations are run using GTAPinGAMS with the GTAP database version 6.0. The creation of the MERCOEURO generated significant results mainly in the agribusiness sector. A reduction in the indirect taxes on final consumption and over the intermediate inputs improve the competition and generate gains in growth, welfare, and government revenue. However, the scenario that reduces the indirect taxes on the Brazilian sectors production cannot increase competition, even though there are positive changes in indicators of growth and welfare. The scenarios generate increased competitiveness, growth variations between 0.05% and 0.19%, with gains in welfare ranging from US$ 2.26 billions and US$ 3.20 billions.

Suggested Citation

  • Pereira, Matheus Wemerson Gomes & Teixeira, Erly Cardoso, 2008. "Economic Impacts of Brazilian Indirect Tax Reduction: An analysis of the competitiveness within MERCOEURO," Working Papers in Applied Economics 53440, Universidade Federal de Vicosa, Departamento de Economia Rural.
    • Handle: RePEc:ags:ufvdwp:53440
    DOI: 10.22004/ag.econ.53440
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/53440/files/WP-01-2008.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.53440?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Xinshen DIAO & Terry L. ROE & A. Erinç YELDAN, 1999. "How Fiscal Mismanagement May Impede Trade Reform: Lessons From An Intertemporal, Multi-Sector General Equilibrium Model For Turkey," The Developing Economies, Institute of Developing Economies, vol. 37(1), pages 59-88, March.
    2. Harrison, W Jill & Pearson, K R, 1996. "Computing Solutions for Large General Equilibrium Models Using GEMPACK," Computational Economics, Springer;Society for Computational Economics, vol. 9(2), pages 83-127, May.
    3. Kehoe, Timothy J. & Serra-Puche, Jaime, 1983. "A computational general equilibrium model with endogenous unemployment : An analysis of the 1980 fiscal reform in Mexico," Journal of Public Economics, Elsevier, vol. 22(1), pages 1-26, October.
    4. Rutherford, Thomas F, 1999. "Applied General Equilibrium Modeling with MPSGE as a GAMS Subsystem: An Overview of the Modeling Framework and Syntax," Computational Economics, Springer;Society for Computational Economics, vol. 14(1-2), pages 1-46, October.
    5. Shoven, John B. & Whalley, John, 1972. "A general equilibrium calculation of the effects of differential taxation of income from capital in the U.S," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 281-321, November.
    6. John B. Shoven & John Whalley, 1973. "General Equilibrium with Taxes: A Computational Procedure and an Existence Proof," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 40(4), pages 475-489.
    Full references (including those not matched with items on IDEAS)

    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. 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.
    2. Zhai, Fan, 2007. "Armington Meets Melitz: Introducing Firm Heterogeneity in Global CGE Model of Trade," Conference papers 331646, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Radulescu, Doina & Stimmelmayr, Michael, 2010. "The impact of the 2008 German corporate tax reform: A dynamic CGE analysis," Economic Modelling, Elsevier, vol. 27(1), pages 454-467, January.
    4. Honkatukia, Juha, 2013. "The VATTAGE Regional Model VERM - A Dynamic, Regional, Applied General Equilibrium Model of the Finn," Research Reports 171, VATT Institute for Economic Research.
    5. Gaspar Núñez Rodríguez & Clemente Polo Andrés, 2008. "An applied general equilibrium analysis of fiscal reforms to fight poverty in Mexico," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 81-115, May.
    6. Michael Leblanc & James Hrubovcak & Ron Durst, 1999. "Changing fiscal federalism in the United States: effects on agriculture and food consumption," Applied Economics, Taylor & Francis Journals, vol. 31(11), pages 1373-1382.
    7. Dixon, Peter B. & Rimmer, Maureen T., 2016. "Johansen's legacy to CGE modelling: Originator and guiding light for 50 years," Journal of Policy Modeling, Elsevier, vol. 38(3), pages 421-435.
    8. Y. Qiang, 1999. "CGE Modelling and Australian Economics," Economics Discussion / Working Papers 99-04, The University of Western Australia, Department of Economics.
    9. Andrew Feltenstein & Luciana Lopes & Janet Porras Mendoza & Sally Wallace, 2013. "“The Impact of Micro-simulation and CGE modeling on Tax Reform and Tax Advice in Developing Countries”: A Survey of Alternative Approaches and an Application to Pakistan," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1309, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    10. Cardenete, Manuel Alejandro & Delgado, M. Carmen, 2015. "A simulation of impact of withdrawal European funds on Andalusian economy using a dynamic CGE model: 2014–20," Economic Modelling, Elsevier, vol. 45(C), pages 83-92.
    11. Andrew Feltenstein & Luciana Lopes & Janet Porras-Mendoza & Sally Wallace, 2014. "Modeling tax reform in developing countries," Chapters, in: Richard M. Bird & Jorge Martinez-Vazquez (ed.), Taxation and Development: The Weakest Link?, chapter 3, pages 69-102, Edward Elgar Publishing.
    12. Romero, Carlos A., 2009. "Calibración de modelos de equilibrio general computado: Métodos y práctica usual [Calibration of CGE models: Methods and current practice]," MPRA Paper 17767, University Library of Munich, Germany.
    13. Donald K. Richter, 1977. "Games Pythagoreans Play," Public Finance Review, , vol. 5(4), pages 495-515, October.
    14. Van Ha, Pham & Kompas, Tom, 2016. "Solving intertemporal CGE models in parallel using a singly bordered block diagonal ordering technique," Economic Modelling, Elsevier, vol. 52(PA), pages 3-12.
    15. Tourinho, Octavio Augusto Fontes & Alves, Yann Le Boulluec & Silva, Napoleão Luiz Costa da, 2010. "Implicações Econômicas da Reforma Tributária: Análise com um Modelo CGE," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 64(3), September.
    16. Thomas Rutherford, 1987. "Implementational Issues and Computational Performance Solving Applied General Equilibrium Models with SLCP," Cowles Foundation Discussion Papers 837, Cowles Foundation for Research in Economics, Yale University.
    17. Pierre-Yves Letournel & Katheline Schubert & Philippe Trainar, 1992. "L'utilisation des modèles d'équilibre général calculables dans l'évaluation de la politique fiscale," Revue Économique, Programme National Persée, vol. 43(4), pages 709-724.
    18. Ianchovichina, Elena, 2004. "Trade policy analysis in the presence of duty drawbacks," Journal of Policy Modeling, Elsevier, vol. 26(3), pages 353-371, April.
    19. Hermeling, Claudia & Klement, Jan Henrik & Koesler, Simon & Köhler, Jonathan & Klement, Dorothee, 2015. "Sailing into a dilemma," Transportation Research Part A: Policy and Practice, Elsevier, vol. 78(C), pages 34-53.
    20. Cai, Yiyong & Newth, David & Finnigan, John & Gunasekera, Don, 2015. "A hybrid energy-economy model for global integrated assessment of climate change, carbon mitigation and energy transformation," Applied Energy, Elsevier, vol. 148(C), pages 381-395.

    More about this item

    Keywords

    International Relations/Trade;

    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:ags:ufvdwp:53440. 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/drufvbr.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.