Key Questions in Considering a Value-Added Tax for Central and Eastern European Countries
IMF Working Papers, July 1, 1991
Source details
- Canonical URL
- Key Questions in Considering a Value-Added Tax for Central and Eastern European Countries
Other formats
Bibliographic details
- Authors: Sijbren Cnossen
- Published: July 1, 1991
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451960631.001
Overview
- Purpose: Examines a wide range of social, economic, structural, and administrative issues pertinent to the introduction of a value-added tax (VAT) in Central and Eastern European countries transitioning to market-oriented tax systems.
- Scope: Draws on the experience with value-added taxation of member states of the European Community (EC) and other OECD countries.
Key issues examined
- Burden distribution of the VAT.
- Effect of the VAT on the price level and economic growth.
- Coverage of the tax and definition of the tax base.
- Choice of the rate structure.
- Legal and administrative aspects of VAT implementation and administration.
- Operational topics referenced in keywords: border tax adjustment, collection date, tax-credit VAT, VAT administration, VAT auditor, VAT base, VAT liability, VAT treatment.
Findings and analytical themes (as presented)
- The paper analyzes how VAT implementation affects distributional outcomes (burden distribution).
- It assesses macroeconomic implications, specifically impacts on the price level and economic growth.
- It evaluates structural design choices: coverage, base definition, and rate structure.
- It reviews legal and administrative requirements and options for effective VAT administration, drawing on EC and OECD country experiences.
Policy considerations and recommendations (topics emphasized)
- Design VAT to balance coverage and equity concerns (coverage and base definition).
- Consider rate-structure choices in light of distributional and growth effects.
- Address legal and administrative frameworks to ensure enforceability and efficient administration.
- Incorporate lessons from EC and OECD VAT experiences in tailoring VAT to transition economies.