EconPapers    
Economics at your fingertips  
 

Remittances and public finances: Evidence from oil-price shocks

Zareh Asatryan, Benjamin Bittschi () and Philipp Doerrenberg

Journal of Public Economics, 2017, vol. 155, issue C, 122-137

Abstract: We study the effect of inflowing remittances – a major source of capital for many countries – on tax revenues and tax policy. Instrumenting remittances with changes in the oil-price interacted with a country's distance to oil-producing countries, we find that remittances have a large positive effect on VAT revenues, but no effect on income-tax revenues. This suggests that remittances often escape the income tax but can be taxed via consumption. We further show that tax policy is responsive to shocks in incoming remittances; they lead to a decrease in VAT-rates and increase the likelihood for a VAT introduction. We find no evidence for effects of remittances on income-tax rates.

Keywords: Remittances; Tax revenue; Tax policy; Value added tax; Personal income tax; Migration; Development (search for similar items in EconPapers)
JEL-codes: F24 H20 O23 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0047272717301524
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Remittances and public finances: Evidence from oil-price shocks (2016) Downloads
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:eee:pubeco:v:155:y:2017:i:c:p:122-137

Access Statistics for this article

Journal of Public Economics is currently edited by R. Boadway and J. Poterba

More articles in Journal of Public Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-03-31
Handle: RePEc:eee:pubeco:v:155:y:2017:i:c:p:122-137