The Icelandic government has launched a review of the tax system, with a view to improving its income redistribution, growth orientation, and efficiency features, as well as increasing its revenue mobilization potential. It aims at minimizing detrimental effects on employment and growth, and at...

This paper highlights the significance of open-economy considerations in the analysis of tax reforms. It focuses on domestic and international consequences of revenue-neutral conversion between income and value-added tax systems. The principal result is that the direction of changes in key...