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The Costs of VAT: A Review of the Literature

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  • Luca Barbone
  • Richard Bird
  • Jaime Vázquez Caro

Abstract

This paper reviews the published literature on the definition and measurement of the administrative and compliance costs of taxation, with special reference to VAT (including evasion and fraud) in the European Union.

Suggested Citation

  • Luca Barbone & Richard Bird & Jaime Vázquez Caro, 2012. "The Costs of VAT: A Review of the Literature," CASE Network Reports 0106, CASE-Center for Social and Economic Research.
  • Handle: RePEc:sec:cnrepo:0106
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    References listed on IDEAS

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    1. Edward Christie & Mario Holzner, 2006. "What Explains Tax Evasion? An Empirical Assessment based on European Data," wiiw Working Papers 40, The Vienna Institute for International Economic Studies, wiiw.
    2. Cedric Sandford, 1981. "Book Review: Costs and Benefits of VAT," Fiscal Studies, Institute for Fiscal Studies, vol. 2(2), pages 61-62, July.
    3. Joshua Aizenman & Yothin Jinjarak, 2008. "The collection efficiency of the Value Added Tax: Theory and international evidence," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 17(3), pages 391-410.
    4. Finn R. Førsund & Sverre A.C. Kittelsen & Frode Lindseth & Dag Fjeld Edvardsen, 2006. "The Tax Man Cometh - But is he Efficient?," National Institute Economic Review, National Institute of Economic and Social Research, vol. 197(1), pages 106-119, January.
    5. World Bank, 2010. "Integration of Revenue Administration : A Comparative Study of International Experience," World Bank Publications - Books, The World Bank Group, number 13529.
    6. Ernst Verwaal & Sijbren Cnossen, 2002. "Europe’s New Border Taxes," Journal of Common Market Studies, Wiley Blackwell, vol. 40(2), pages 309-330, June.
    7. von Soest, Christian, 2006. "Measuring the Capability to Raise Revenue: Process and Output Dimensions and Their Application to the Zambia Revenue Authority," GIGA Working Papers 35, GIGA German Institute of Global and Area Studies.
    8. Lant Pritchett & Mary Hallward-Driemeier, 2010. "How Business is Done and the 'Doing Business' Indicators: The Investment Climate when Firms have Climate Control," CID Working Papers 211, Center for International Development at Harvard University.
    9. Bird, Richard M. & Martinez-Vazquez, Jorge & Torgler, Benno, 2008. "Tax Effort in Developing Countries and High Income Countries: The Impact of Corruption, Voice and Accountability," Economic Analysis and Policy, Elsevier, vol. 38(1), pages 55-71, March.
    10. Bird,Richard & Gendron,Pierre-Pascal, 2011. "The VAT in Developing and Transitional Countries," Cambridge Books, Cambridge University Press, number 9781107401440.
    11. Áureo de Paula & Jose A. Scheinkman, 2010. "Value-Added Taxes, Chain Effects, and Informality," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(4), pages 195-221, October.
    12. Hunter, William J & Nelson, Michael A, 1995. "Tax Enforcement: A Public Choice Perspective," Public Choice, Springer, vol. 82(1-2), pages 53-67, January.
    13. Laura Cavallo & Giuseppe Coco & Mario Martelli, 2009. "Evaluating administrative burdens through SCM: some indications from the Italian experience," SERIES 0023, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Apr 2009.
    14. Keen, Michael & Smith, Stephen, 2006. "VAT Fraud and Evasion: What Do We Know and What Can Be Done?," National Tax Journal, National Tax Association;National Tax Journal, vol. 59(4), pages 861-887, December.
    15. Keen, Michael, 2008. "VAT, tariffs, and withholding: Border taxes and informality in developing countries," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 1892-1906, October.
    16. James, Simon & Edwards, Alison, 2010. "An annotated bibliography of tax compliance and tax compliance costs," MPRA Paper 26106, University Library of Munich, Germany.
    17. Agha, Ali & Haughton, Jonathan, 1996. "Designing VAT Systems: Some Efficiency Considerations," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 303-308, May.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Christian EBEKE & Mario MANSOUR & Grégoire ROTA-GRAZIOSI, 2016. "The Power to Tax in Sub-Saharan Africa: LTUs, VATs, and SARAs," Working Papers P154, FERDI.
    2. Makoto Hasegawa, 2019. "Territorial Tax Reform and Profit Shifting by US and Japanese Multinationals," KIER Working Papers 1016, Kyoto University, Institute of Economic Research.
    3. Mukherjee, Sacchidananda & Rao, R. Kavita, 2015. "Factors Influencing Unincorporated Enterprises to Register under Value Added Tax (VAT): An Analysis with Enterprises Survey Data," Working Papers 15/145, National Institute of Public Finance and Policy.
    4. Romain Houssa & Kelbesa Megersa, 2017. "Institutional quality, economic development and the performance of VAT," BeFinD Working Papers 0115, University of Namur, Department of Economics.
    5. Sijbren Cnossen, 2017. "VAT and Agriculture: Lessons from Europe," CPB Discussion Paper 341, CPB Netherlands Bureau for Economic Policy Analysis.
    6. Sijbren Cnossen, 2018. "VAT and agriculture: lessons from Europe," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(2), pages 519-551, April.
    7. Sijbren Cnossen, 2017. "VAT and Agriculture: Lessons from Europe," CPB Discussion Paper 341.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    8. Sijbren Cnossen, 2017. "VAT and Agriculture: Lessons from Europe," CESifo Working Paper Series 6350, CESifo.
    9. Hana Zídková, 2014. "Determinants of VAT Gap in EU," Prague Economic Papers, Prague University of Economics and Business, vol. 2014(4), pages 514-530.

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    More about this item

    Keywords

    Taxation; Subsidies; Revenue;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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