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I would like to thank Emanuele Baldacci, Thomas Baunsgaard, Dora Benedek, John Brondolo, Martin Grote, Jacques Miniane, James Morsink, Abdelhak Senhadji, and seminar participants at the European Department and the Ministry of Finance of Lithuania for helpful suggestions and comments, as well as Zhaogang Qiao and Gillian Adu for excellent research assistance. Audrone Mikneviciene from the Ministry of Finance of Lithuania has kindly provided the data. The usual disclaimer applies.
In case of the VAT, the elasticity is set to unity without conducting any estimations.
Comparison tables are provided in the most recent periodical on taxation trends in the European Union (see European Commission, 2011).
European Commission (2011) contains detailed description of major tax system changes in Lithuania before and during the crisis (see pages 215-217). Specifically, in 2009 VAT statutory rate was raised from 18 to 21 percent, PIT statutory rate was reduced from 24 to 21 percent, CIT statutory rate was temporarily raised from 15 to 20 percent and then reversed back to 15 percent, and EX rates on fuel, alcohol, and tobacco have changed to comply with the EU regulation.
Higher score reflects more efficiency, and vice versa. Median scores are reported instead of averages to alleviate the impact of outliers and extreme observations.
Robustness checks using moving windows of different sizes produce qualitatively similar results.
The 10 new EU members were chosen as a comparator sample to Lithuania. Unfortunately, the panel data analysis cannot be extended to PIT, CIT, and EX due to considerable differences in respective tax systems across countries.