Do Value-Added Taxes Affect International Trade Flows? Evidence from 30 Years of Tax Reforms

Value-Added Taxes and International Trade: The Evidence

This paper examines the effect of value-added taxes (VATs) on international trade. Destination-based VATs are commonly thought to encourage exports, since exports are exempt from tax while imports are taxed. Economic theory implies that exchange rate adjustment prevents destination-based VATs from affecting exports and imports, since exchange rate appreciation completely undoes the effects of i...

value added tax and tax evasion

The phenomenon of tax evasion has been always one of the most major issues among economists due to it's devastating effects on the economy and the process of economic development. Many scholars have always sought to provide solutions to reduce and limit tax evasion. The introduction of the VAT system can be seen as a milestone in the area of economic transparency and tax evasion, which refers t...

International Trade Effects of Value-Added Taxation

DO TAXES AFFECT CORPORATE DEBT POLICY? Evidence from U.S. Corporate Tax Return Data

This paper uses U.S. Statistics of Income (SOI) Corporate Income Tax Returns balance sheet data on all corporations, to estimate the effects of changes in corporate tax rates on the debt policies of firms of different sizes. Small firms face very different tax rates than larger firms, and relative tax rates have also changed frequently over time, providing substantial information to identify ta...

The Added Value of Value Added Tax

Raising domestic tax revenues is a priority for most sub-Saharan African countries. But the tax bases in most African countries are undermined by widespread tax avoidance and evasion. A new study from CMI supports the claim that improved knowledge about the tax system makes a difference in people’s willingness to pay tax. The study shows that exposure to Value-AddedTax (VAT) makes people take a...