Using the Value Added Tax for Redistributive Purposes in Italy: Is it Still Worth?

Paolo Liberati and Federica Lanterna ()
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Federica Lanterna: University Roma Tre, Department of Economics

No 266, Departmental Working Papers of Economics - University 'Roma Tre' from Department of Economics - University Roma Tre

Abstract: This paper shows that a Vat structure with multiple tax rates in Italy is not the most effective way to pursue redistributive aims. As the tax revenue of the Italian Vat is particularly affected by the use of reduced tax rates and exemptions, compared to other European countries, we suggest that a shift to a uniform Vat associated to cash transfers to households with children might better achieve redistributive targets on the neediest part of the population. This outcome could even be potentially improved by considering that a uniform Vat may significantly reduce Vat evasion due to the difference of tax rates applied to sales and purchases.

Keywords: Vat; Redistribution; Cash transfers; Italy (search for similar items in EconPapers)
JEL-codes: H20 H23 H25 (search for similar items in EconPapers)
Pages: 51
Date: 2022-02
New Economics Papers: this item is included in nep-acc, nep-iue, nep-pbe and nep-pub
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Published in The Working papers -Dipartimento di Economia Università degli studi di Roma Tre

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Persistent link: https://EconPapers.repec.org/RePEc:rtr:wpaper:0266

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