{
  "title": "International Vat Harmonization: Economic Effects",
  "publication": "IMF Working Papers, February 1, 1991",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/international-vat-harmonization-economic-effects-898",
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  "summary": "This paper highlights key macroeconomic issues related to VAT harmonization. A model is developed which emphasizes the effects of changes in the time profile of various taxes on international behavior.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Authors: Jacob A. Frenkel, Steven A. Symansky, Assaf Razin\n- Publication date: February 1, 1991\n- Core focus: Highlights key macroeconomic issues related to VAT harmonization and analyzes the effects of changes in the time profile of various taxes on international behavior.\n- Main methodological approach: Development of a model emphasizing temporal tax-profile effects and dynamic simulations."
    },
    {
      "heading": "Model and Simulations",
      "content": "- A model is developed which emphasizes the effects of changes in the time profile of various taxes on international behavior.\n- Dynamic simulations are used to assess macroeconomic and welfare implications under alternative tax systems and behavioral parameters."
    },
    {
      "heading": "Key Findings",
      "content": "- The macroeconomic and welfare implications of VAT harmonization depend critically on:\n  - the tax system, and\n  - the degree of substitution governing temporal and intertemporal allocations.\n- Conflicts of interest among countries can arise and their nature depends on the structure of the tax system and substitution parameters.\n- The effects of revenue-neutral tax conversions between income and consumption tax systems undertaken by a single country depend critically on international differences in behavior."
    },
    {
      "heading": "Policy Implications and Considerations",
      "content": "- VAT harmonization outcomes cannot be evaluated without detailed consideration of:\n  - the specific tax system in place, and\n  - behavioral responses (substitution elasticities) across time and between countries.\n- Revenue-neutral conversions between income and consumption taxes in one country can have materially different international effects depending on cross-country behavioral differences; policymakers should account for international heterogeneity when designing such reforms."
    },
    {
      "heading": "Subject and Keywords (as listed)",
      "content": "- Subject: Cash-flow tax, Consumption, Consumption taxes, Income tax systems, National accounts, Revenue administration, Taxes, Value-added tax\n- Keywords: cash flow, Cash-flow tax, Consumption, current account position, discount factor, Europe, Global, harmonization arise, home country VAT, Income tax systems, supply schedule, tax revenue, tax system, terms of trade, Value-added tax, VAT harmonization, VAT HARMONIZATION, VAT system, WP\n\n---\n\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/international-vat-harmonization-economic-effects-898"
    }
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    "Authors: Jacob A. Frenkel, Steven A. Symansky, Assaf Razin",
    "Published: February 1, 1991",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451921175.001",
    "Authors: Jacob A. Frenkel, Steven A. Symansky, Assaf Razin",
    "Publication date: February 1, 1991",
    "Core focus: Highlights key macroeconomic issues related to VAT harmonization and analyzes the effects of changes in the time profile of various taxes on international behavior.",
    "Main methodological approach: Development of a model emphasizing temporal tax-profile effects and dynamic simulations.",
    "A model is developed which emphasizes the effects of changes in the time profile of various taxes on international behavior.",
    "Dynamic simulations are used to assess macroeconomic and welfare implications under alternative tax systems and behavioral parameters.",
    "The macroeconomic and welfare implications of VAT harmonization depend critically on:",
    "Conflicts of interest among countries can arise and their nature depends on the structure of the tax system and substitution parameters.",
    "The effects of revenue-neutral tax conversions between income and consumption tax systems undertaken by a single country depend critically on international differences in behavior.",
    "VAT harmonization outcomes cannot be evaluated without detailed consideration of:",
    "Revenue-neutral conversions between income and consumption taxes in one country can have materially different international effects depending on cross-country behavioral differences; policymakers should account for international heterogeneity when designing such reforms.",
    "Subject: Cash-flow tax, Consumption, Consumption taxes, Income tax systems, National accounts, Revenue administration, Taxes, Value-added tax",
    "Keywords: cash flow, Cash-flow tax, Consumption, current account position, discount factor, Europe, Global, harmonization arise, home country VAT, Income tax systems, supply schedule, tax revenue, tax system, terms of trade, Value-added tax, VAT harmonization, VAT HARMONIZATION, VAT system, WP"
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