The Economic Incidence of Replacing a Retail Sales Tax by a Value-Added Tax: Evidence from Canadian Experience

A decade ago, several Canadian provinces replaced the retail sales taxes by value-added taxes. This paper estimates the effects of this tax substitution on consumer prices in the reforming provinces. Consistent with theory, we find that the resulting effective tax rate changes were shifted forward to consumers in most sectors of the economy. The overall effect on tax-inclusive consumer prices was small, albeit perhaps somewhat regressive.

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Year of publication:	2008-06
Authors:	Bird, Richard M. ; Smart, Michael
Institutions:	Rotman Institute for International Business, Rotman School of Management
Subject:	tax incidence \| sales tax \| value-added tax \| Canada

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Extent:	application/pdf
Series:	Working Papers Series.
Type of publication:	Book / Working Paper
Notes:	Number 14 19 pages longPages
Classification:	H22 - Incidence ; H25 - Business Taxes and Subsidies ; H71 - State and Local Taxation, Subsidies, and Revenue
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005642080