The Anatomy of the Vat

Michael Keen

National Tax Journal, 2013, vol. 66, issue 2, 423-446

Abstract: This paper sets out some tools for understanding the performance of the value added tax (VAT). Applying a decomposition of VAT revenues (as a share of GDP) to the universe of VATs over the last 20 years shows that developments have been driven much less by changes in standard rates than by changes in “C-efficiency” (an indicator of the departure of the VAT from a perfectly enforced tax levied at a uniform rate on all consumption). Decomposing C-efficiency for EU members into a “policy gap” (in turn divided into effects of rate differentiation and exemption) and a “compliance gap” (reflecting imperfect implementation) suggests that the former are in almost all cases far larger than the latter, with rate differentiation and exemptions playing roles that differ quite widely across countries.

Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (60)

Downloads: (external link)
https://doi.org/10.17310/ntj.2013.2.06 (application/pdf)
https://doi.org/10.17310/ntj.2013.2.06 (text/html)
Access is restricted to subscribers and members of the National Tax Association.

Related works:
Working Paper: The Anatomy of the VAT (2013)
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:ntj:journl:v:66:y:2013:i:2:p:423-446

Access Statistics for this article

National Tax Journal is currently edited by Stacy Dickert-Conlin and William M. Gentry

More articles in National Tax Journal from National Tax Association, National Tax Journal Contact information at EDIRC.
Bibliographic data for series maintained by The University of Chicago Press ().