Microsimulation Model for Distributional Analysis of Consumption Taxes

Consumption taxes are traditional source of public revenue in the Czech Republic and have been the second largest source of leakage of households' finance in the last decade following the social security contributions. However there is a lack of the precise redistributional analyses of the consumption taxation on individual/household level because of no suitable microsimulation model for the Czech Republic. This paper focuses on the construction of the static microsimulation model capable estimates individual VAT burden using data from the Czech Household Survey. This model is possible to be used in area of redistributional analysis of the tax reforms or in identification of statistically significant variables influencing tax burden.