Estimating the Base of the Value-Added Tax (VAT) in Developing Countries
Author | : Mr.George A. Mackenzie |
Publisher | : International Monetary Fund |
Total Pages | : 18 |
Release | : 1991-02-01 |
ISBN-10 | : 9781451921465 |
ISBN-13 | : 1451921462 |
Rating | : 4/5 (462 Downloads) |
Download or read book Estimating the Base of the Value-Added Tax (VAT) in Developing Countries written by Mr.George A. Mackenzie and published by International Monetary Fund. This book was released on 1991-02-01 with total page 18 pages. Available in PDF, EPUB and Kindle. Book excerpt: Developing countries with VATs typically exempt a large number of goods and services. Following a brief discussion of the rationale for exemptions, this paper presents a formula for the base of a VAT with exemptions. Two basic adjustments must be made to the base without exemptions: subtraction of the value of sales to consumers of exempt industries and addition of intermediate sales of taxable inputs to exempt industries. The paper concludes with a derivation of the elasticity of a VAT with exemptions with respect to aggregate consumption and a discussion of the implications of technological change for the VAT base.