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Have VAT rates reached their limit?: an empirical note

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  • Kent Matthews
  • Jean Lloyd-Williams

Abstract

Value-added taxes (VAT) have increased in a number of developed economies in recent years. The shift towards consumption taxes in general and VAT in particular has made it a politically sensitive tax. While it is generally accepted that an expenditure tax such as VAT is less distortionary and more efficient to collect than an income tax, there is increasing concern that VAT rates have reached or are close to their revenue maximizing limit. Empirical evidence is produced to support this view.

Suggested Citation

  • Kent Matthews & Jean Lloyd-Williams, 2000. "Have VAT rates reached their limit?: an empirical note," Applied Economics Letters, Taylor & Francis Journals, vol. 7(2), pages 111-115.
    • Handle: RePEc:taf:apeclt:v:7:y:2000:i:2:p:111-115
    DOI: 10.1080/135048500351933
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    References listed on IDEAS

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    Cited by:

    1. Mr. Kevin Fletcher, 2005. "Increasing Public Sector Revenue in the Philippines: Equity and Efficiency Considerations," IMF Working Papers 2005/022, International Monetary Fund.
    2. Keen, Michael & Lockwood, Ben, 2010. "The value added tax: Its causes and consequences," Journal of Development Economics, Elsevier, vol. 92(2), pages 138-151, July.
    3. 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.
    4. Kent Matthews, 2003. "VAT Evasion and VAT Avoidance: Is there a European Laffer curve for VAT?," International Review of Applied Economics, Taylor & Francis Journals, vol. 17(1), pages 105-114.
    5. Fikri R. Arrachman & Riatu M. Qibthiyyah, 2018. "The Relationship of VAT Rate and Revenues in the Case of Informality," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 64, pages 73-96, Juni.

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