The (Non-)Neutrality of Value Added Taxation — Frank Stähler

Speaker

Prof. Dr. Frank Stähler (University Tübingen)

Abstract

This paper employs a structural gravity model for final goods trade and novel VAT regime data to investigate the impact of value-added taxes (VATs) on final goods imports and domestic production of final goods. We show that a VAT increase does not only reduce imports and internal trade of final goods but also leads to a relative increase in internal trade compared to aggregate imports. This result can only be explained by changes in pre-tax pricing behavior. A conservative quantification shows that a 1% increase in the VAT rate implies a welfare loss of 1.6 to 3.2 % in the European Union.

Room

Conference Room at the Kiel Institute for the World Economy and via Zoom

Please note:
There is a very limited capacity for attending the seminar at the Kiel Institute. If you plan to join in person, please send an enquiry to kcg-office@ifw-kiel.de for registration. 
To join the seminar via Zoom, please send an email to kcg-office@ifw-kiel.de to receive the corresponding Zoom-Link.