营业税改征增值税外文文献及译文.docx
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营业税改征增值税外文文献及译文
营业税改征增值税外文文献及译文
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外文文献:
ComparingtheValue-AddedTaxtotheRetailSalesTax
ForRichardF.Dye,ThereseJ.McGuire
JournalofPublicEconomics
April2011
OverviewofVAT
Morethan130countriesuseVATasakeysourceofgovernmentrevenue.VATisageneral,broad-basedconsumptiontaxassessedonthevalueaddedtogoodsandservices.VATisgenerallyleviedonvalueaddedateverystageofproduction,withamechanismallowingthesellersacreditforthetaxtheyhavepaidontheirownpurchasesofgoodsandservices(inputtax)againstthetaxescollectedontheirsalesofgoodsandservice(outputtax).Generally,VATis:
Ageneraltaxthatappliestoallcommercialactivitiesinvolvingtheproductionanddistributionofgoodsandtheprovisionofservices;Aconsumptiontaxultimatelybornebytheconsumer;Anindirecttaxleviedontheconsumeraspartofthepriceofgoodsorservices;Amultistagetaxvisibleateachstageoftheproductionanddistributionchain;andAfractionallycollectedtaxthatusesasystemofpartialpaymentswherebyasellerchargesVATonallofitssaleswithacorrespondingclaimofcreditforVATthatithasbeenchargedonallofitspurchases.
TherearethreemethodsofcalculatingVATliability:
thecredit-invoicemethod,thesubtractionmethod,andtheadditionmethod.Thiscolumndealswithonlythecredit-invoicemethod,whichisthemostwidelyused.Thecredit-invoicemethodhighlightstheVATdefiningfeature:
theuseofoutputtax(taxcollectedonsales)andinputtax(taxpaidonpurchases).AtaxpayergenerallycomputesitsVATliabilityasthedifferencebetweentheVATchargedontaxablesalesandtheVATpaidontaxablepurchases.ThismethodrequirestheuseofaninvoicethatseparatelyliststheVATcomponentofalltaxablesales.Thesalesinvoiceforthesellerbecomesthepurchaseinvoiceofthebuyer.Thesalesinvoiceshowstheoutputtaxcollectedandthepurchaseinvoiceshowstheinputtaxpaid.Tosummarize,taxpayersusethecredit-invoicemethodtocalculatetheamountofVATtoberemittedtothetaxingauthoritiesinthefollowingmanner:
AggregatetheVATshowninthesalesinvoices(outputtax);AggregatetheVATshowninthepurchaseinvoices(inputtax);Subtracttheinputtaxfromtheoutputtaxandremitanybalancetothegovernment;andIntheeventtheinputtaxisgreaterthantheoutputtax.TheUnitedStatesistheonlymemberoftheOrganizationofEconomicCooperationandDevelopmentthatdoesnotlevyaVATonanationallevel;however,VAThasbecomewidelyrecognizedasanimportantoptioninfederaltaxreformdebates.
Indirecttaxessuchasvalueaddedtaxes(VAT)generateasubstantialpartoftaxrevenueinmanycountries.Infact,VATsystemsgenerateaquarteroftheworld’staxrevenue.Nearly130countriesnowhaveaVATsystem(withover70countrieshavingadoptedthesystemduringthelast10years)(KeenandMintz2004).MorefocusoninternationallymobiletaxbaseshasdrawnattentiontodirectingmoreofthetaxburdentoindirecttaxessuchasconsumptiontaxesorVATsystems,andlesstoincometaxes,especiallycapitalincome(GordonandNielsen1997).DuringtheharmonizationofEUtaxes,indirecttaxes,andVATsystemsreceivedmuchattention(Fehret
al.1995).AgeneralVATlawcoveringallprivategoodsandservicescharacterizesthecurrentEUsystem,buttherearestillmanyexemptionsfromthisgeneralinstruction.SuchaVATsystemalsoexistsinNorwayasaconsequenceoftheNorwegianVATreformin2001.ThereformintroducedageneralVATlawonservices,butmanyexemptionsarestillspecified.
ThereareseveralargumentsinfavorofageneralanduniformVATsystem,comparedwithimperfect,nonuniform(andnongeneral)systems.Suchasystemmayimproveeconomicefficiencyandreduceadministrationcosts,rent-seekingandfraudactivitiesbyindustriesthatlobbyforlowerratesandzeroratings(KeenandSmith2006).AgeneralanduniformVATsystemequalsauniformconsumertaxonallgoodsandservices.Suchasystemalsoimpliesthattheproducers’netVATrateonmaterialinputsequalszero,irrespectiveoftheratestructure.Thisisoptimalaccordingtotheproductionefficiencytheorem(DiamondandMirrlees1971a,1971b).AVATsystemwithexemptionsviolatestheproductionefficiencytheorembecause
taxationofintermediateswilldifferbetweenindustries.Ontheotherhand,industriesthatarecoveredbytheVATsystembuthavelowerratesorzeroratingsontheirsalesarefavoredbecausetheycanwithdrawexpenditurestoVATonintermediatesatfullratesandonlylevyreducedorzeroratesontheirsales.
AgeneralanduniformVATsystemmayalsohavepositiveeffectsonthedistributionofwelfareamonghouseholds.IftheinitialsituationischaracterizedbyaVATonmostgoodsbutonlyonafewservices,theintroductionofauniformrateonallgoodsandservicesmayimprovethedistributionofwelfarebecauseservices’shareofconsumptionincreaseswithincome.
Keen(2007)pointstothelackofinterestinvalueaddedtaxationfromthetheoreticalsecond-bestliteratureinspiteoftheVAT’spopularityinpracticaltaxpolicy.Asmentionedabove,VATsystemsareingeneralnotuniform.Theoreticalanalysesdemandrelativelysimplemodelsandsimpletaxstructurestobeanalyticallytractable.Inpracticalpolicies,thestructuresoftheeconomyandthetaxsystemsarequitecomplex,andthereisaneedfordetailednumericalmodelsinordertoanalyzetheeffectsofdifferentVATsystems.ThispapercontributestotheliteraturebyanalyzingthewelfareeffectsofanimperfectextensionofanonuniformVATsystem,andcomparingdifferentimperfect,nonuniformVATsystemswithauniformandgeneral
VATsystemwithinanempiricallybaseddynamiccomputablegeneralequilibrium(CGE)modelforasmallopeneconomy.Thismodelmirrorsarealeconomy,Norway,anddiffersinmanyrespectsfromthemoresimpletheoreticalmodelsthatfulfilltheassumptionsofnormativetaxtheoryandrecommenduniformcommoditytaxes,combinedwithnoinputtaxation.
Inouranalyses,weaskthefollowingquestions.CantheintroductionofanonuniformVATsystemincludingonlysomeservicesmaketheeconomyworseoffthanhavingaVATsystemonlycoveringgoodsandinthatcase,why?
SuchreformscharacterizeboththeNorwegianVATreformof2001andtheEUVATreformfromthelate1990-ties.WillanadditionalextensiontoauniformandgeneralVATsystembewelfaresuperiortothenonuniform(andnongeneral)VATsystemsandwhatareimportantpreconditions?
Aswillbeexplainedbelow,onecannotonpurelytheoreticalgroundsestablishthewelfarerankingsofsuchVATsystemswhentherearepreexistingdistortionsastaxwedgesandmarketpowerintheeconomy.ThebaselineVATsystemisanonuniformVATsystemmainlycoveringgoods.ThisbaselineVATsystemisthencomparedwith
(1)theextendednonuniformNorwegianVATreformof2001,and
(2)ageneralVATsystemcharacterizedbyauniformVATrateonallgoodsandservices,includingpublicgoodsandservices.TheNorwegianVATreformof2001wasastepinthedirectionofageneralVATsystembyincludingmanyservices,buttherearestillmanyexemptions,zeroratingsandlowerrates.Inparticular,theVATrateonfoodandnonalcoholicbeveragesishalfthegeneralVATrate.Thepolicyreformsaremadepublicrevenueneutral,andchangesinlumpsumtransfersaswellasinthesystemspecificVATratearestudied.Witharevenue-neutralchangein
thesystem-specificVATrate,theVATsystemscanberankedwithrespecttowelfare
effects.
Ballardetal.(1987)andGottfriedandWiegard(1991)analyzethewelfareeffectsofdifferentVATsystemsincludingtaxexemptionsandzeroratingsinstaticCGEmodels.TheseparabilityandhomogeneityassumptionsintheirconsumerdemandmodelsfavorauniformVATsystem,whichissupportedintheirpolicysimulations.Incontrast,ourmodelisanintertemporalCGEmodelforasmallopeneconomywithoutstricthomogeneityassumptionsinconsumerdemand.OurmodeliswelldesignedforanalyzingVATreformsbecauseitdistinguishesbetweenmanyindustries,inputfactorsandconsumergoodsandservices.Themodelingandparametersintheconsumerdemandsystemandtheproductiontechnologyarealltheresultsofcomprehensivemicro-andmacroeconometricanalysesofNorwegiandata.ThemodelhasadetaileddescriptionoftheNorwegiansystemofdirectandindirecttaxes.Specifically,netVATratesontheinputfactorsandgrossVATratesontheconsumergoodsandservicesareincludedinthemodel.Wedisregardtheeffectsoncostsofadministration,rent-seekinganddistributionofwelfareamonghouseholds.Themodelemphasizesthesmallopeneconomycharacteristicsbyusinggivenworldmarketpricesandinterestrates.Imperfectcompetitionispresentinthedomesticmarkets.AuniformandgeneralVATsystemisnotapriorithemostefficientinourmodel.
WhencomparingthetwodifferentnonuniformVATsystems,ouranalysisshowsthatanimperfectextensionoftheVATsystemtocovermoreservicesiswelfareinferiortothebaselinenonuniformVATsystemonlycoveringgoods.ObtainingefficiencyinproductionisempiricallyimportantforthewelfareeffectsofthedifferentVATsystems.AnimperfectextensionoftheVATsystemreducesefficiencyinproductionbecauseintermediateswillbetaxeddifferentlyfordifferentindustries.ConsumerefficiencyisalsoreducedduetolowerVAToninelasticgoodsandhigherVATonelasticservices.IntroducingageneralanduniformVATsystemisnotobviouslywelfaresuperiorinadistortedeconomy,butwefindthatsuchasystemimproves
welfarecomparedtotheotherimperfectregimes.Asignificantemp