Indirect Tax Incidence in Brazil : Assessing the Distributional Effects of Potential Tax Reforms
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 avai...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2021
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| Online Access: | http://documents.worldbank.org/curated/undefined/606861640025992934/Indirect-Tax-Incidence-in-Brazil-Assessing-the-Distributional-Effects-of-Potential-Tax-Reforms http://hdl.handle.net/10986/36783 |
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okr-10986-367832021-12-24T05:10:42Z Indirect Tax Incidence in Brazil : Assessing the Distributional Effects of Potential Tax Reforms Lara Ibarra, Gabriel Rubiao, Rafael Macedo Fleury, Eduardo TAX BURDEN FISCAL INCIDENCE TAXATION INDIRECT TAX DISTRIBUTIONAL IMPACT VALUE ADDED TAX INEQUALITY TAX REFORM EFFECTIVE TAX RATE 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 R$100 of indirect tax revenue, the first and second deciles pay R$2 and R$3, respectively, while the ninth and tenth deciles pay R$16 and R$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. 2021-12-23T19:08:39Z 2021-12-23T19:08:39Z 2021-12 Working Paper http://documents.worldbank.org/curated/undefined/606861640025992934/Indirect-Tax-Incidence-in-Brazil-Assessing-the-Distributional-Effects-of-Potential-Tax-Reforms http://hdl.handle.net/10986/36783 English Policy Research Working Paper;No. 9891 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Latin America & Caribbean Brazil |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
TAX BURDEN FISCAL INCIDENCE TAXATION INDIRECT TAX DISTRIBUTIONAL IMPACT VALUE ADDED TAX INEQUALITY TAX REFORM EFFECTIVE TAX RATE |
| spellingShingle |
TAX BURDEN FISCAL INCIDENCE TAXATION INDIRECT TAX DISTRIBUTIONAL IMPACT VALUE ADDED TAX INEQUALITY TAX REFORM EFFECTIVE TAX RATE Lara Ibarra, Gabriel Rubiao, Rafael Macedo Fleury, Eduardo Indirect Tax Incidence in Brazil : Assessing the Distributional Effects of Potential Tax Reforms |
| geographic_facet |
Latin America & Caribbean Brazil |
| relation |
Policy Research Working Paper;No. 9891 |
| description |
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 R$100 of indirect tax
revenue, the first and second deciles pay R$2 and R$3,
respectively, while the ninth and tenth deciles pay R$16 and
R$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. |
| format |
Working Paper |
| author |
Lara Ibarra, Gabriel Rubiao, Rafael Macedo Fleury, Eduardo |
| author_facet |
Lara Ibarra, Gabriel Rubiao, Rafael Macedo Fleury, Eduardo |
| author_sort |
Lara Ibarra, Gabriel |
| title |
Indirect Tax Incidence in Brazil : Assessing the Distributional Effects of Potential Tax Reforms |
| title_short |
Indirect Tax Incidence in Brazil : Assessing the Distributional Effects of Potential Tax Reforms |
| title_full |
Indirect Tax Incidence in Brazil : Assessing the Distributional Effects of Potential Tax Reforms |
| title_fullStr |
Indirect Tax Incidence in Brazil : Assessing the Distributional Effects of Potential Tax Reforms |
| title_full_unstemmed |
Indirect Tax Incidence in Brazil : Assessing the Distributional Effects of Potential Tax Reforms |
| title_sort |
indirect tax incidence in brazil : assessing the distributional effects of potential tax reforms |
| publisher |
World Bank, Washington, DC |
| publishDate |
2021 |
| url |
http://documents.worldbank.org/curated/undefined/606861640025992934/Indirect-Tax-Incidence-in-Brazil-Assessing-the-Distributional-Effects-of-Potential-Tax-Reforms http://hdl.handle.net/10986/36783 |
| _version_ |
1764485887307022336 |