Equity and Efficiency Tradeoff in Bangladesh Tax Policy Reform: A Computable General Equilibrium Model

Osman H. Chowdhury
Additional contact information
Osman H. Chowdhury: University of the Philippines

Philippine Review of Economics, 1989, vol. 26, issue 2, 262-286

Abstract: This study has employed a computable general equilibrium (CGE) tax model for Bangladesh to directly assess the efficiency and equity effects of a set of proposed tax reforms, particularly excise tax, import tariff, direct tax and value-added tax. It has been found that pure excise tax reforms in the short run for resource mobilization have undesirable consequences on both efficiency and equity grounds. Tariff liberalization may enhance welfare even in the short run. But it is only through simultaneous reforms in all taxes that both equity and e?iciency can be improved. A limited VAT stands out as a better alternative to excise taxes on e?iciency ground but may not be a desirable policy option on equity ground in the short run. The overall results would point out that any single indirect tax reform can not be relied upon for favorable income redistribution in the short run.

Date: 1989
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://pre.econ.upd.edu.ph/index.php/pre/article/download/283/431 (application/pdf)

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:phs:prejrn:v:26:y:1989:i:2:p:262-286

Access Statistics for this article

More articles in Philippine Review of Economics from University of the Philippines School of Economics and Philippine Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by HR Rabe ().