Tax Systems Under Fiscal Adjustment: A Dynamic CGE Analysis of the Brazilian Tax Reform
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
This paper uses a dynamic computable general equilibrium model (CGE) to analyze the macroeconomic and redistributive effects of replacing turnover and financial transaction taxes in Brazil by a consumption tax. In order to approximate Brazil's compliance with its fiscal adjustment targets, the proposed reform is subject to a non increasing path for the level of public debt. Despite an increase in the average consumption tax rate in the first years after the reform, a majority of individuals experienced an increase in their lifetime welfare. This result rejects the hypothesis that the on-going fiscal adjustment effort carried on by the Brazilian government was an obstacle to the implementation of a more efficient tax system.
Series:
Working Paper No. 2005/142
Subject:
Consumption Consumption taxes Fiscal consolidation Fiscal policy National accounts Public debt Revenue administration Taxes
English
Publication Date:
July 1, 2005
ISBN/ISSN:
9781451861617/1018-5941
Stock No:
WPIEA2005142
Pages:
33
Please address any questions about this title to publications@imf.org