In West Africa, the Value Added Tax (VAT) policy consists of a uniform tax rate, but several items consumed by rich and poor households, are exempted. We provide an optimal tax framework to reflect on the welfare effects of such a tariff structure, in the context of current debates on domestic...

The relative efficiency of ad valorem and unit taxes is analyzed for oligopolistic markets. We provide a simple proof that ad valorem taxes welfare-dominate unit taxes in the short run if production costs are identical across firms. The proof covers a wide range of market conduct and...

Commodities communicate. Consumers choose a consumption bundle both for its intrinsic characteristics and for what this bundle communicates about their qualities (or .identity.) to spectators. We investigate optimal indirect taxation when consumption choices are motivated by two sorts of...

Commodities communicate. Consumers choose a consumption bundle both for its intrinsic characteristics and for what this bundle communicates about their qualities (or 'identity') to spectators. We investigate optimal indirect taxation when consumption choices are motivated by two sorts of...

This paper proposes a new methodology to test for whether indirect tax reforms are pro-poor. The methodology extends stochastic dominance techniques and enables identifying tax reforms that will necessarily be deemed absolutely or relatively pro-poor by a wide spectrum of poverty analysts. The...

This paper analyzes the effects of specific and ad valorem taxation in an industry with downstream and upstream oligopoly. We find that in the short run, i.e. when the number of firms in both markets is exogenous, the results concerning tax incidence tend to be qualitatively similar to models...

In New Zealand, excise taxes are levied on three commodity groups: alcohol, tobacco and petrol. The 2001 Tax Review, published by the New Zealand Treasury, argued that excises are inequitable and inefficient, and advised that these taxes should be removed and the revenue replaced by raising the...

This paper analyzes the effects of specific and ad valorem taxation in an industry with downstream and upstream oligopoly. We find that in the short run, i.e. when the number of firms in both markets is exogenous, the results concerning tax incidence tend to be qualitatively similar to models...

Commodities communicate. We investigate optimal indirect taxation when both the intrinsic qualities of goods and signaling motivate consumption choices. Optimal indirect taxes are introduced into a monotonic signaling game. We provide sufficient conditions for the uniqueness of the D1 sequential...

Distortions under the value-added tax (VAT) arise mainly from the exemption of specific services and sectors. This paper develops an analytical model that is applicable to any sector characterized by asymmetric VAT exemptions of services and activities or differentiated tax rates. We analyze the...