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The Equity Impact of the Value-Added Tax in Bangladesh
Author:
Mr. Shahabuddin M Hossain
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Series:
IMF Working Papers
Volume/Issue:
Volume 1994: Issue 125
Language:
English
Publication Date:
01 Oct 1994
DOI:
https://doi.org/10.5089/9781451854770.001
ISBN:
9781451854770
ISSN:
1018-5941
Pages:
24
Keywords:
WP; indirect tax; zero rating; commodity group; uniform VAT; VAT scheme; VAT system; group i. see text; shadow consumption tax measure; Value-added tax; Agricultural commodities; Consumption taxes; Eastern Europe
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper investigates the income distributional implications of different value-added tax (VAT) schemes in Bangladesh. The results indicate that a revenue-neutral uniform VAT is regressive in its impact on the income of different households. This paper explores an alternative policy package, consisting of a basic rate of VAT with exemptions for certain commodity groups, chosen on the basis of their distributional characteristics. The welfare consequences of the alternative package are found to be superior to those of the uniform VAT.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund