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Dual VATs and Cross-Border Trade: Two Problems, One Solution?

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  • Richard Bird
  • Pierre Gendron

Abstract

In recent years, two distinct but related questions have been raised with respect to value-added taxes (VATs). Concern has been expressed over whether it is desirable or even possible for both national and subnational governments in federal countries such as India, Argentina, and Russia to impose VATs. One reason for thinking that such subnational VATs are unlikely to be workable on a destination basis is the problem of cross-border trade. Of course, this same problem also arises within the European Union, where there is no “EU” VAT. Drawing upon Canadian experience, we argue that not only is it possible to have “two-tier” or “dual” VATs on a destination basis in a single country but that the existence of dual VATs may help deal with some of the problems of cross-border trade. Copyright Kluwer Academic Publishers 1998

Suggested Citation

  • Richard Bird & Pierre Gendron, 1998. "Dual VATs and Cross-Border Trade: Two Problems, One Solution?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 5(3), pages 429-442, July.
    • Handle: RePEc:kap:itaxpf:v:5:y:1998:i:3:p:429-442
    DOI: 10.1023/A:1008646613637
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