Understanding the Revenue Productivity of Value Added Tax

Jose Sebastian

The IUP Journal of Public Finance, 2011, vol. IX, issue 4, 28-40

Abstract: Available evidences show that Value Added Tax (VAT) has been quite revenue productive in the case of most Indian states. This paper enquires into the factors contributing to it by piecing together evidences from various sources. There are four major factors—harmonization of the rate structure, abolition of exemptions and concessions to industries, widening of the tax base, and reduction in compliance cost—behind the revenue productivity of VAT. The paper argues that the transparency that VAT has brought about in the tax structure and the whole process of tax compliance and the reduction in compliance cost have been more important than the widening of the tax base that VAT is supposed to have brought about. In the context of switching over to Goods and Services Tax (GST), this factor has important implications.

Date: 2011
References: Add references at CitEc
Citations Track citations by RSS feed

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
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:icf:icfjpf:v:09:y:2011:i:4:p:28-40

Access Statistics for this article

More articles in The IUP Journal of Public Finance from IUP Publications
Series data maintained by G R K Murty ().