Modelling value-added tax in the presence of multiproduction and differentiated exemptions

James Giesecke and Nhi Tran ()

MPRA Paper from University Library of Munich, Germany

Abstract: We develop a framework for economy-wide modelling of value-added tax systems. Our framework models a number of complexities of VAT systems as they are implemented by tax agencies. In particular, we model multiple rates, multiple exemptions, multiple degrees of refundability across commodity users, and multi-product enterprises. A detailed VAT framework is important for correct modelling of VAT within a general equilibrium model. Such a framework is also of value in correctly representing the distribution of indirect tax payments within the database of a general equilibrium model, a prerequisite of accurate welfare analysis. We use the model to analyse the effects of simplifying Vietnam’s complex VAT system. We simplify the system by moving from three tax rates to one budget-neutral rate, while also removing many discretionary exemptions.

Keywords: value added tax; dynamic CGE model; Vietnam; indirect tax reform (search for similar items in EconPapers)
JEL-codes: C68 H21 H25 (search for similar items in EconPapers)
Date: 2009-03-03
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Modelling value-added tax in the presence of multi-production and differentiated exemptions (2010)
Working Paper: Modelling Value-Added Tax in the Presence of Multiproduction and Differentiated Exemptions (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:13914

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