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Comparing marginal commodity tax reforms in Japan and Korea

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  • Urakawa, Kunio
  • Oshio, Takashi

Abstract

We examine the impact of the marginal commodity tax reforms in Japan and Korea, using data from the official household surveys of the two countries. Based on the estimations of two demand systems (linear expenditure system (LES) and almost ideal demand system(AIDS)), we compare the marginal costs of taxing major commodity groups, examine distributive gains from tax reforms based on concentration curves, and assess the impact on poverty based on consumption dominance curves. In particular, we find that revenue-neutral marginal tax reforms incorporating a reduced tax on food and beverages are more likely to face an efficiency-equity trade-off in Korea than in Japan.

Suggested Citation

  • Urakawa, Kunio & Oshio, Takashi, 2010. "Comparing marginal commodity tax reforms in Japan and Korea," Journal of Asian Economics, Elsevier, vol. 21(6), pages 579-592, December.
    • Handle: RePEc:eee:asieco:v:21:y:2010:i:6:p:579-592
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    References listed on IDEAS

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    1. Peter Tóth & Andrej Cupák & Marian Rizov, 2021. "Measuring the efficiency of VAT reforms: a demand system simulation approach," Oxford Economic Papers, Oxford University Press, vol. 73(3), pages 1218-1243.
    2. Joong-Ho Kook & Seok Gyu Choi, 2022. "A Comparative Study of Household Consumption Patterns and Optimal Commodity Tax Rates between Korea and Japan," Korean Economic Review, Korean Economic Association, vol. 38, pages 479-507.
    3. Siti Nur’amalina Syeddin & Nor Zarina Mohd Salim & Hafini Suhana Ithnin & Noormahayu Mohd Nasir & Zarul Azhar Nasir, 2024. "Goods and Services Tax vs. Sales and Services Tax: Different Structures Impact on the Households’ Expenditure Pattern," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(9), pages 951-963, September.
    4. Andrej Cupák & Peter Tóth, 2017. "Measuring the Efficiency of VAT reforms: Evidence from Slovakia," Working and Discussion Papers WP 6/2017, Research Department, National Bank of Slovakia.

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