The Equity Impact of the Value-Added Tax in Bangladesh

Shahabuddin Hossain

No 1994/125, IMF Working Papers from International Monetary Fund

Abstract: This paper investigates the income distributional implications of different value-added tax (VAT) schemes in Bangladesh. The results indicate that a revenue-neutral uniform VAT is regressive in its impact on the income of different households. This paper explores an alternative policy package, consisting of a basic rate of VAT with exemptions for certain commodity groups, chosen on the basis of their distributional characteristics. The welfare consequences of the alternative package are found to be superior to those of the uniform VAT.

Keywords: WP; indirect tax; zero rating; commodity group; uniform VAT; VAT scheme; VAT system; group i. see text; shadow consumption tax measure; Value-added tax; Agricultural commodities; Consumption taxes; Eastern Europe (search for similar items in EconPapers)
Pages: 24
Date: 1994-10-01
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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1994/125

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