Zero-rating versus cash transfers under the VAT Marius van Oordt
By: Oordt, Marius van
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Material type: 
ArticlePublisher: 2018Subject(s): RENTAS BAJAS | PRESION FISCAL | ALIMENTOS | IMPUESTO SOBRE EL VALOR AÑADIDO | REDUCCIONES TRIBUTARIASOnline resources: Click here to access online
In:
Fiscal Studies v. 39, n. 3, September 2018, p. 489-515Summary: To reduce the tax burden on the poor, nearly every VAT system allows for special treatment of certain goods or services. Zero-rating the supply of certain foodstuffs is a prominent example of this practice. Using data on South Africa, this paper considers whether taxing foodstuffs alongside compensating cash
transfers may be preferred to zero-rating foodstuffs in a developing country context. The results show that cash transfers may be preferred if all the additional revenue from eliminating the zero rate can be earmarked and government is perfectly efficient. In the likely absence of earmarking and perfect efficiency, developing countries may need to apply special treatment
to some foodstuffs to protect the poor. If this is the case, it is proposed that zero-rating can be preferred to the exemption of certain foodstuffs.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| Artículos | IEF | IEF | OP 1472/2018/3-2 (Browse shelf) | Available | OP 1472/2018/3-2 |
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Resumen.
Bibliografía.
To reduce the tax burden on the poor, nearly every VAT system allows for special treatment of certain goods or services. Zero-rating the supply of certain foodstuffs is a prominent example of this practice. Using data on South Africa, this paper considers whether taxing foodstuffs alongside compensating cash
transfers may be preferred to zero-rating foodstuffs in a developing country context. The results show that cash transfers may be preferred if all the additional revenue from eliminating the zero rate can be earmarked and government is perfectly efficient. In the likely absence of earmarking and perfect efficiency, developing countries may need to apply special treatment
to some foodstuffs to protect the poor. If this is the case, it is proposed that zero-rating can be preferred to the exemption of certain foodstuffs.
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