Some International Issues in Commodity Taxation

Michael Keen

No 2002/124, IMF Working Papers from International Monetary Fund

Abstract: This paper reviews issues and evidence concerning tax-motivated, cross-border commodity transactions. A distinction is drawn between "arbitrage trades" (driven by cross-country differences in tax rates) and "tax not paid" transactions (motivated by the opportunity to pay no tax at all on transactions with international aspects). Assessment of the severity of the associated policy problems faces the difficulty that the observed extent of cross-border transactions conveys no information on the induced inefficiency that the possibility of such transactions may generate. Given the difficulty of securing coordination of national tax policies, much of the emphasis in dealing with these problems in the coming years is likely to be on administrative cooperation.

Keywords: WP; sales tax; cross-border transaction; tax competition; destination state; monopoly power; Commodity Taxation; Cross-border shopping; small country; Tennessee state tax rate; state excise; Consumption taxes; Value-added tax; Subnational tax; Arbitrage; Eastern Europe (search for similar items in EconPapers)
Pages: 27
Date: 2002-07-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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