The Double Dividend of a Joint Tariff and VAT Reform: Evidence from Iran

doi:10.1093/wber/lhad002

Publication:
The Double Dividend of a Joint Tariff and VAT Reform: Evidence from Iran

creativeworkseries.issn	1564-698X
dc.contributor.author	Yousefi, Kowsar
dc.contributor.author	Vesal, Mohammad
dc.date.accessioned	2024-03-28T18:43:21Z
dc.date.available	2024-03-28T18:43:21Z
dc.date.issued	2023-02-06
dc.description.abstract	This paper provides empirical evidence on a novel complementarity between VAT and trade taxes. Downstream domestic firms require VAT receipts from importers to claim VAT on purchases, increasing incentives for honest reporting of imports. Trade gap, the difference between mirror and domestic trade reports in Iran at 6-digit HS disaggregation, is used to measure this complementarity. Iran introduced VAT in 2008 and, since then, has increased its rate from 3 to 9 percent. Difference-in-differences estimates show that a 1 percentage point increase in the VAT rate reduces the trade gap by about 2 percent. Consistent with the compliance mechanisms for VAT, a smaller effect for consumer products that have a shorter value chain is observed. Findings suggest that replacing tariffs with VAT results in a double dividend. Tax revenue might increase due to better tariff compliance and a broader VAT base.	en
dc.identifier	http://documents.worldbank.org/curated/en/099235409042323365/IDU040f223a80b0ae040b40b64501fd98747778a
dc.identifier.citation	The World Bank Economic Review
dc.identifier.doi	10.1596/41317
dc.identifier.issn	0258-6770 (print)
dc.identifier.issn	1564-698X (online)
dc.identifier.uri	https://hdl.handle.net/10986/41317
dc.language	English
dc.language.iso	en_US
dc.publisher	Published by Oxford University Press on behalf of the World Bank
dc.relation.ispartofseries	World Bank Economic Review
dc.rights	CC BY-NC-ND 3.0 IGO
dc.rights.holder	World Bank
dc.rights.uri	https://creativecommons.org/licenses/by-nc-nd/3.0/igo/
dc.subject	VALUE ADDED TAX
dc.subject	TRADE LIBERALIZATION
dc.subject	TARIFFS
dc.subject	CHAINS EFFECT
dc.subject	TAX COMPLIANCE
dc.title	The Double Dividend of a Joint Tariff and VAT Reform	en
dc.title.subtitle	Evidence from Iran	en
dc.type	Journal Article
dspace.entity.type	Publication
okr.associatedcontent	https://academic.oup.com/wber/article/37/2/331/7028408 Journal website (version of record)
okr.crossref.title	The Double Dividend of a Joint Tariff and VAT Reform: Evidence from Iran
okr.date.disclosure	2024-03-28
okr.date.lastmodified	2023-09-04T00:00:00Z	en
okr.doctype	Journal Article
okr.doctype	Publications & Research
okr.docurl	http://documents.worldbank.org/curated/en/099235409042323365/IDU040f223a80b0ae040b40b64501fd98747778a
okr.guid	099235409042323365
okr.identifier.docmid	IDU-40f223a8-b0ae-40b4-b645-1fd98747778a
okr.identifier.doi	10.1093/wber/lhad002
okr.identifier.doi	https://doi.org/10.1596/41317
okr.identifier.externaldocumentum	34155737
okr.identifier.internaldocumentum	34155737
okr.identifier.report	184759
okr.import.id	3680
okr.imported	true	en
okr.language.supported	en
okr.pagenumber	331-349
okr.pdfurl	http://documents.worldbank.org/curated/en/099235409042323365/pdf/IDU040f223a80b0ae040b40b64501fd98747778a.pdf	en
okr.peerreview	Academic Peer Review
okr.region.administrative	Middle East and North Africa
okr.region.country	Iran, Islamic Republic of
okr.topic	Macroeconomics and Economic Growth::Taxation & Subsidies
okr.topic	International Economics and Trade::Trade Policy
okr.unit	EMNM1 - EFI - MNA - MTIC - 1
okr.volume	37 (2)
relation.isJournalIssueOfPublication	78e5953a-501c-4643-b0cc-a37fb6e094ae
relation.isJournalIssueOfPublication.latestForDiscovery	78e5953a-501c-4643-b0cc-a37fb6e094ae
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