Indirect Taxation in Developing Countries: A General Equilibrium Approach


Ary Lars Bovenberg

Publication Date:

September 1, 1986

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


Indirect taxes are an important element in stabilization tax packages that aim at raising revenue in the short run. This paper evaluates, by using a general equilibrium model, alternative instruments of indirect taxation in middle-income developing countries. It uses data for Thailand as an illustration and examines the effects on revenue, efficiency, equity, and international competitiveness. The paper shows that the interaction between taxes and distortions caused by various policies can be important for revenue and efficiency. It also reveals significant backward shifting and a link between outward-looking supply-side tax policies and trade policies in industrial countries.


Working Paper No. 1986/001



Publication Date:

September 1, 1986



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