Optimal Tax Base with Administrative Fixed Costs

Stephane Gauthier

Post-Print from HAL

Abstract: This note characterizes the optimal base for commodity taxation in the presence of administrative fixed costs varying across goods. For low tax rates, the optimal base only comprises commodities whose discouragement index is greater than the ratio of their administrative costs to the tax they yield. An illustration with UK data shows that a category of goods should be taxed only if the revenue generated on this category is at least ten times greater than its administrative fixed cost. The cost imputable to the category of goods taxed at the standard rate would be at most 6 percent of total VAT revenue.The administration cost associated with categories of goods currently tax free could justify exemption.

Keywords: indirect taxation; VAT; tax base; administrative costs (search for similar items in EconPapers)
Date: 2013-12
New Economics Papers: this item is included in nep-pbe and nep-pub
Note: View the original document on HAL open archive server: https://hal.science/hal-00731095v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in International Tax and Public Finance, 2013, 20 (6), pp.961-973. ⟨10.1007/s10797-012-9254-8⟩

Downloads: (external link)
https://hal.science/hal-00731095v1/document (application/pdf)

Related works:
Journal Article: Optimal tax base with administrative fixed costs (2013)
Working Paper: Optimal Tax Base with Administrative Fixed Costs (2013)
Working Paper: Optimal Tax Base with Administrative Fixed Costs (2013)
Working Paper: Optimal Tax Base with Administrative fixed Costs (2011)
Working Paper: Optimal Tax Base with Administrative fixed Costs (2011)
Working Paper: Optimal Tax Base with Administrative Fixed Costs (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00731095

DOI: 10.1007/s10797-012-9254-8

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().