The Equity Impact of the Value-Added Tax in Bangladesh

Author/Editor:

Shahabuddin M Hossain

Publication Date:

October 1, 1994

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 1994/125

Subject:

Notes:

Also published in Staff Papers, Vol. 42, No. 2, June 1995.

English

Publication Date:

October 1, 1994

ISBN/ISSN:

9781451854770/1018-5941

Stock No:

WPIEA1251994

Pages:

24

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