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Indirect Tax Incidence in Brazil : Assessing the Distributional Effects of Potential Tax Reforms / Gabriel Lara Ibarra.
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Lara Ibarra, Gabriel.
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Distributional Impact.
- Effective Tax Rate.
- Fiscal Incidence.
- Indirect Tax.
- Inequality.
- Macroeconomics and Economic Growth.
- Public Sector Development.
- Tax Burden.
- Tax Reform.
- Taxation.
- Taxation and Subsidies.
- Value Added Tax.
- Local Subjects:
- Distributional Impact.
- Effective Tax Rate.
- Fiscal Incidence.
- Indirect Tax.
- Inequality.
- Macroeconomics and Economic Growth.
- Public Sector Development.
- Tax Burden.
- Tax Reform.
- Taxation.
- Taxation and Subsidies.
- Value Added Tax.
- Physical Description:
- 1 online resource (36 pages)
- Other Title:
- Indirect Tax Incidence in Brazil
- Place of Publication:
- Washington, D.C. : The World Bank, 2021.
- System Details:
- data file
- Summary:
- Using recent expenditure survey data, this paper investigates the incidence of all indirect taxes in Brazil. It applies a novel approach to estimate the effective tax rate by computing the specific cumulative taxes levied on thousands of items available in the data set. The findings show that for every RD 100 of indirect tax revenue, the first and second deciles pay RD 2 and RD 3, respectively, while the ninth and tenth deciles pay RD 16 and RD 33, respectively. Meanwhile, indirect taxes represent between 23 and 45 percent of income among the poorest households. Simulations of a value-added tax reform suggest that it could be inequality reducing both horizontally and vertically. A flat value-added tax accompanied by excise taxes on fuel items, alcohol, and tobacco would also lead to lower decreases in expenditures. Households would spend 2.8 percent less on average, with those in the bottom (top) decile spending 7.0 percent (1.5 percent) less.
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