Tariff and Consumption Tax Reforms in a Developing Tourism Economy
Chi-Chur Chao (),
Jean-Pierre Laffargue () and
Hamid Beladi
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Chi-Chur Chao: CUHK - The Chinese University of Hong Kong [Hong Kong]
Jean-Pierre Laffargue: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique
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Abstract:
This paper examines the effects of a coordinated tax reform by replacing import tariffs with point-by-point increases in consumption taxes for a small-open developing tourism economy. Foreign tourists demand for the non-traded goods provided in the informal sector of the host economy, resulting in a tourism-induced terms-of-trade effect. The presence of inbound tourism lends a support to positive tariffs even for a small open economy. The indirect tax reform of this kind can increase residents' welfare and government revenue when the initial tariffs are relatively larger to the consumption taxes.
Keywords: Tariffs; consumption taxes; tourism (search for similar items in EconPapers)
Date: 2015-11-01
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Published in Journal of International Trade and Economic Development, 2015, 24 (6), pp.822-834
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Related works:
Journal Article: Tariff and Consumption Tax Reforms in a Developing Tourism Economy (2015) 
Working Paper: Tariff and Consumption Tax Reforms in a Developing Tourism Economy (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01450797
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