Taxation and Industrialization: Global Evidence from the Introduction of the Value Added Tax By RABAH AREZKI, FREDERICK VAN DER PLOEG, GREGOIRE ROTA-GRAZIOSI AND

Grégoire Rota-Graziosi (), Rabah Arezki, Frederick van Der Ploeg and Van Dao ()
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Grégoire Rota-Graziosi: CERDI - Centre d'Études et de Recherches sur le Développement International - UCA [2017-2020] - Université Clermont Auvergne [2017-2020] - CNRS - Centre National de la Recherche Scientifique, FERDI - Fondation pour les Etudes et Recherches sur le Développement International
Frederick van Der Ploeg: University of Oxford
Van Dao: VNU - Vietnam National University [Hanoï]

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Abstract: The introduction of the Value Added Tax (VAT) has been widely perceived as a successful instrument, boosting government revenue and stimulating industrialization. However, in countries that are heavily dependent on exports of natural resources the introduction of the VAT has led on average to lower tax revenues and did not stimulate industrialization. The VAT thus did not help these countries to diversify away from the natural resource sector contrary to its promise. This suggests that the VAT in those countries has failed and should be redesigned. The results indicate a novel channel for the resource curse hinging on the interaction between economic structure and the design of tax systems.

Keywords: Natural resource tax industrialization value added tax JEL codes: H25 O13 O14; Natural resource; tax; industrialization; value added tax JEL codes: H25; O13; O14 (search for similar items in EconPapers)
Date: 2025-06-13
Note: View the original document on HAL open archive server: https://hal.science/hal-05111441v1
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