## Estimating VAT Pass Through

_IMF Working Papers, September 30, 2015_

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## Bibliographic details
- Authors: Dora Benedek, Ruud A. de Mooij, Philippe Wingender
- Published: September 30, 2015
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513586359.001

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### Overview
- Paper estimates the pass through of VAT changes to consumer prices using a unique dataset with disaggregated, monthly data on prices and VAT rates for 17 Eurozone countries over 1999-2013.
- Authors: Dora Benedek, Ruud A. de Mooij, Philippe Wingender.
- Date: September 30, 2015.
- Series: Working Paper No. 2015/214; Issue: 214; Volume: 2015; Pages: 41.
- DOI: https://doi.org/10.5089/9781513586359.001.
- ISBN: 9781513586359.
- ISSN: 1018-5941.

### Key empirical findings
- Aggregate pass through:
  - Pass through is much less than full on average.
  - For changes in the standard rate, final pass through is about 100 percent.
  - For reduced rates, final pass through is around 30 percent.
  - For reclassifications, final pass through is essentially zero.
- Dynamics and heterogeneity:
  - Differing dynamics of pass through for durables and non-durables.
  - No significant difference in pass through between rate increases and decreases.
  - Signs of non-monotonicity in the relationship between pass through and the breadth of the consumption base affected.
  - Indications of significant anticipation effects together with some evidence of lagged effects in the two years around reform.
- Robustness:
  - Results are robust against endogeneity and attenuation bias.

### Subject areas and keywords (as listed)
- Subject: Consumer prices, Consumption, Consumption taxes, Labor, National accounts, Prices, Taxes, Unemployment rate, Value-added tax.
- Keywords: confidence interval, Consumer prices, consumer spending, Consumption, consumption category, consumption share, Consumption taxes, cross-price elasticity, Europe, Pass through, Price effect, Tax incidence, Unemployment rate, Value added tax, Value-added tax, VAT rate change, VAT reform, WP.

*IMF Working Paper — Dora Benedek, Ruud A. de Mooij, and Philippe Wingender. "Estimating VAT Pass Through", September 30, 2015.*

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/estimating-vat-pass-through-43322_