WTO Membership and the Shift to Consumption Taxes

Thiess Büttner and Boryana Madzharova

No 6052, CESifo Working Paper Series from CESifo

Abstract: Using a panel of 97 mostly developing and transitional countries for the period 1990-2011, this paper explores fiscal implications of membership in the World Trade Organization (WTO). Em-ploying robust difference-in-difference specifications as well as semi-parametric methods, we find that countries joining the WTO experience a decline in revenues from import duties between 0.5% and 1% of GDP. Revenue losses from import duties are more than compensated for by an increase in consumption taxes. Although triggered by WTO accession, the shift towards consumption taxes, in particular to VAT, typically takes place before trade liberalization commitments result in declining tariff revenues.

Keywords: trade liberalization; tax reform; value added tax; GATT; WTO; anticipation effects; synthetic control group method (search for similar items in EconPapers)
JEL-codes: F13 H20 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: WTO membership and the shift to consumption taxes (2018)
Working Paper: WTO Membership and the Shift to Consumption Taxes (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6052

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