Working Paper: CEPR ID: DP9320
Authors: Omar Chisari; Antonio Estache; Gatan Nicodeme
Abstract: This paper assesses the effects of applying VAT or a sales tax on (intermediate or final) sales of the financial sector. It uses a CGE Model calibrated for a small open economy. It highlights the differentiated sectoral and redistributional effects of these taxes and shows the importance of the financial openness of the economy on these results.
Keywords: Belgium; Financial Sector; Modeling; Sales Tax; Taxation; VAT
JEL Codes: H20; H25; H30; H87
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| 15% VAT (H25) | GDP (E20) |
| 15% VAT (H25) | welfare of households (I30) |
| 10% sales tax (H71) | GDP (E20) |
| 10% sales tax (H71) | size of financial sector's activities (G20) |
| 10% sales tax (H71) | welfare of rich households (I31) |
| 15% VAT (H25) | redistribution (H23) |
| 10% sales tax (H71) | redistribution (H23) |