Vietnam’s New Environmental Tax Law: What Will it Cost? Who Will Pay?
Ian Coxhead and
Nguyen Van Chan
No 116704, Staff Papers from University of Wisconsin-Madison, Department of Agricultural and Applied Economics
Abstract:
We examine the effects of a proposed environmental tax in a small open developing economy, using an applied general equilibrium model linked to a household survey database. The burden of the tax, applied primarily to fossil fuels, is passed forward by non-traded industries and backward by industries selling into the world market. It causes efficiency and competitiveness losses equivalent to those of a real exchange rate appreciation, and since export industries are in general highly labor-intensive, is regressive and thus poverty-increasing. The budget-neutral use of increased tax revenues to raise spending on anti-poverty programs can offset most of the losses of poor households, but does not create new jobs. The extent of overall losses and their distribution is sensitive to some parameters, such as labor supply response, about which little is currently known in a developing-country context.
Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 45
Date: 2011-08
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https://ageconsearch.umn.edu/record/116704/files/stpap561.pdf (application/pdf)
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Working Paper: Vietnam's New Environmental Tax Law: What Will It Cost? Who Will Pay? (2011) 
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Persistent link: https://EconPapers.repec.org/RePEc:ags:wisagr:116704
DOI: 10.22004/ag.econ.116704
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