The effect of tax-tariff reform: evidence from Ukraine

Olena Sokolovska and Dmytro Sokolovskyi ()

MPRA Paper from University Library of Munich, Germany

Abstract: The paper examines the tax-tariff reform, recommended for Ukraine by donor organization (IMF and the World Bank), which consists in trade liberalization by way of trade tax cuts with simultaneous compensation of state tax revenue losses by VAT base broadening. We developed the mathematical model of evaluation of crossborder taxation influence on commodity flows, on economic agents’ profits and on state tax revenues, which can be considered as extension of “Devarajan” and “Emran–Stiglitz” models, with regard to possibility of tax evasion and receiving the illegally compensated VAT. The evaluation of model using data bases, prepared by Ukrainian State Statistic Committee and Customs administration of Ukraine, revealed that the expediency to reform a tax-tariff system, according to the IMF recommendations, is not clearly obvious and it depends on tax rates elasticity of size of informal sector. We find that providing the trade liberalization by way of substitution of trade tax revenues by enlarged VAT is expedient in those branches of economy, which are characterized by monopoly and oligopoly situation.

Keywords: trade tax; tax-tariff reform; VAT; informal sector (search for similar items in EconPapers)
JEL-codes: C30 F13 H26 (search for similar items in EconPapers)
Date: 2011-10-10
New Economics Papers: this item is included in nep-acc, nep-iue and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/42643/4/MPRA_paper_42643.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:42643

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().