{
  "title": "Designing a Progressive VAT",
  "publication": "IMF Working Papers, April 5, 2024",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2024/04/05/designing-a-progressive-vat-546923",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2024/04/05/designing-a-progressive-vat-546923",
  "overlayPath": "/en/publications/wp/issues/2024/04/05/designing-a-progressive-vat-546923/index.md",
  "summary": "This paper presents a novel approach to addressing VAT regressivity, by proposing the adoption of a progressive VAT: a single-rate, broad-base, VAT, whereby tax paid on consumption is re-paid to lower income households in real-time, at the moment of purchase.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Proposes a progressive VAT: a single-rate, broad-base, VAT, whereby tax paid on consumption is re-paid to lower income households in real-time, at the moment of purchase.\n- Aims to effectively eliminate regressivity while minimizing political economy, cash-flow, and welfare stigma obstacles associated with standard welfare transfers used in modern VAT systems.\n- Highlights additional significant advantages, particularly in terms of compliance incentives."
    },
    {
      "heading": "Key findings and features",
      "content": "- Design: single-rate, broad-base VAT combined with real-time repayment to lower income households at the moment of purchase.\n- Distributional impact: can effectively eliminate VAT regressivity.\n- Political economy and administrative advantages:\n  - Minimizes political economy obstacles.\n  - Minimizes cash-flow obstacles for beneficiaries.\n  - Minimizes welfare stigma associated with transfers.\n- Compliance incentives: the progressive VAT design would have significant advantages in terms of compliance incentives."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Adopt a progressive VAT structure that retains a single rate and broad base while delivering targeted relief through real-time repayment at point of purchase.\n- Replace or supplement standard welfare transfers to avoid cash-flow delays and stigma, and to improve administrative simplicity and acceptance.\n- Leverage the compliance benefits of the design to strengthen VAT performance."
    },
    {
      "heading": "Publication and metadata",
      "content": "- Authors: Artur Swistak, Rita de la Feria\n- Publication date: April 5, 2024\n- Series: Working Paper No. 2024/078\n- Issue: 078\n- Volume: 2024\n- Pages: 31\n- DOI: https://doi.org/10.5089/9798400271830.001\n- Stock No: WPIEA2024078\n- ISBN: 9798400271830\n- ISSN: 1018-5941\n- Subjects: Consumption, Consumption taxes, Income, Income distribution, National accounts, Taxes, Value-added tax\n- Keywords: Consumption, Consumption taxes, Global, Income, Income distribution, la Feria, stigma obstacle, Value-added tax, VAT design, VAT incidence, VAT system\n- Additional note: IMF eLibrary offers over 25,000 IMF publications in multiple formats.\n\nIMF Working Paper — Designing a Progressive VAT (Artur Swistak and Rita de la Feria), April 5, 2024.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2024/04/05/designing-a-progressive-vat-546923"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2024/04/05/designing-a-progressive-vat-546923/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2024/04/05/designing-a-progressive-vat-546923/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2024/04/05/designing-a-progressive-vat-546923/bundle-manifest.json)",
    "Authors: Artur Swistak, Rita de la Feria",
    "Published: April 5, 2024",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798400271830.001",
    "Proposes a progressive VAT: a single-rate, broad-base, VAT, whereby tax paid on consumption is re-paid to lower income households in real-time, at the moment of purchase.",
    "Aims to effectively eliminate regressivity while minimizing political economy, cash-flow, and welfare stigma obstacles associated with standard welfare transfers used in modern VAT systems.",
    "Highlights additional significant advantages, particularly in terms of compliance incentives.",
    "Design: single-rate, broad-base VAT combined with real-time repayment to lower income households at the moment of purchase.",
    "Distributional impact: can effectively eliminate VAT regressivity.",
    "Political economy and administrative advantages:",
    "Compliance incentives: the progressive VAT design would have significant advantages in terms of compliance incentives.",
    "Adopt a progressive VAT structure that retains a single rate and broad base while delivering targeted relief through real-time repayment at point of purchase.",
    "Replace or supplement standard welfare transfers to avoid cash-flow delays and stigma, and to improve administrative simplicity and acceptance.",
    "Leverage the compliance benefits of the design to strengthen VAT performance.",
    "Authors: Artur Swistak, Rita de la Feria",
    "Publication date: April 5, 2024",
    "Series: Working Paper No. 2024/078",
    "Issue: 078",
    "Volume: 2024",
    "Pages: 31",
    "DOI: https://doi.org/10.5089/9798400271830.001",
    "Stock No: WPIEA2024078",
    "ISBN: 9798400271830",
    "ISSN: 1018-5941",
    "Subjects: Consumption, Consumption taxes, Income, Income distribution, National accounts, Taxes, Value-added tax",
    "Keywords: Consumption, Consumption taxes, Global, Income, Income distribution, la Feria, stigma obstacle, Value-added tax, VAT design, VAT incidence, VAT system",
    "Additional note: IMF eLibrary offers over 25,000 IMF publications in multiple formats.",
    "**Working Paper**"
  ],
  "related": [
    {
      "title": "Working Paper",
      "role": "paper",
      "sourceUrl": "https://www.imf.org/-/media/files/publications/wp/2024/english/wpiea2024078-print-pdf.pdf",
      "summary": {
        "path": "/-/media/files/publications/wp/2024/english/wpiea2024078-print-pdf.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/files/publications/wp/2024/english/wpiea2024078-print-pdf.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2024/04/05/designing-a-progressive-vat-546923/index.md",
    "json": "/en/publications/wp/issues/2024/04/05/designing-a-progressive-vat-546923/index.json",
    "bundleManifest": "/en/publications/wp/issues/2024/04/05/designing-a-progressive-vat-546923/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-16T23:55:51.556Z"
}