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ON THE POVERTY AND EQUITY IMPLICATIONS OF A RISE IN THE VALUE ADDED TAX: A MICROECONOMIC SIMULATION FOR LEBANON

Nisreen Salti and Jad Chaaban
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Jad Chaaban: Department of Agricultural Sciences, American University of Beirut, Lebanon

Middle East Development Journal (MEDJ), 2010, vol. 02, issue 01, 121-138

Abstract: This paper examines the impact of a rise in the Value Added Tax (VAT) on poverty and inequality in Lebanon. The paper develops an empirical model based on consumer demand theory and uses only household survey data on expenditures and spatial price indexes. The simulation results, using own and cross price demand elasticities estimated with an Almost Ideal Demand System, show that the proposed VAT rate increases will have a non-negligible impact on poverty and inequality in Lebanon, despite current VAT exemptions.

Keywords: VAT; poverty and social impact analysis; tax reform (search for similar items in EconPapers)
Date: 2010
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http://www.worldscientific.com/doi/abs/10.1142/S1793812010000174
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Working Paper: The Poverty and Equity Implications of A Rise in the Value Added Tax: A Microeconomic Simulation for Lebanon (2009) Downloads
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DOI: 10.1142/S1793812010000174

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