The Distributional Effects of Value Added Tax in Ireland
In this paper we examine the distributional effects of Value Added Tax (VAT) in Ireland. Using the 2004/2005 Household Budget Survey, we assess the amount of VAT that households pay as a proportion of weekly disposable income. We measure VAT payments by equivalised income decile, households of different composition and different household sizes. The current system is highly regressive. With the use of a micro-simulation model we also estimate the impact of changing the VAT rate on certain groups of items and the associated change in revenue. We also consider how the imposition of a flat rate across all goods and services would affect households in different categories. The Irish Government has recently announced that it proposes to increase the standard rate of VAT to 22% in 2013 and to 23% in 2014. We examine the distributional implications of such increases. The general pattern of results shows that those hardest hit are households in the first income decile, households in rural areas, 6 person households and households containing a single adult with children.
|Date of creation:||Dec 2010|
|Date of revision:|
|Contact details of provider:|| Postal: Whitaker Square, Sir John Rogerson's Quay, Dublin 2|
Phone: (353-1) 863 2000
Fax: (353-1) 863 2100
Web page: http://www.esri.ie
More information through EDIRC
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.:
- Richard S. J. Tol & Tim Callan & Thomas Conefrey & John FitzGerald & Seán Lyons & Laura Malaguzzi Valeri & Susan Scott, 2008. "A Carbon Tax for Ireland," Papers WP246, Economic and Social Research Institute (ESRI).
- Tim Callan & Claire Keane & John Walsh, 2010.
"What Role for Property Taxes in Ireland?,"
The Economic and Social Review,
Economic and Social Studies, vol. 41(1), pages 87-107.
- Verde, Stefano & Tol, Richard S. J., 2009. "The Distributional Impact of a Carbon Tax in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 40(3), pages 317–338.
- Callan, Tim & Lyons, Sean & Scott, Susan & Tol, Richard S.J. & Verde, Stefano, 2009.
"The distributional implications of a carbon tax in Ireland,"
Elsevier, vol. 37(2), pages 407-412, February.
- Tim Callan & Sean Lyons & Sue Scott & Richard S. J. Tol & Stefano Verde, 2008. "The Distributional Implications of a Carbon Tax in Ireland," Papers WP250, Economic and Social Research Institute (ESRI).
When requesting a correction, please mention this item's handle: RePEc:esr:wpaper:wp366. 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: (Sarah Burns)
If references are entirely missing, you can add them using this form.