The Value Added Tax Incidence – the Case of the Book Market in CEE Countries
Journal Title: Finance a uver - Year 2018, Vol 68, Issue 2
Abstract
Conducting effective economic policy requires understanding of how taxes are shifted. The value added tax rates on books in the Czech Republic, Hungary, Poland and Slovakia in 2003 – 2012 differed much and changed several times, hence it was a good case for exploring the tax incidence. The main objective of the article is to answer the question to whom (consumers, capital, labour) and to what extent the burden of the value added tax on books was shifted. Although the tax is often classified as a consumption tax, the tax on books wasn’t shifted to consumers at least within five months after a tax rate change. The research suggests that the tax is shifted to capital and labour. According to the econometric models, an increase of the value added tax rate on books of 1 percentage point leads to a decrease of the return on equity of book publishers between 0,43 and 0,76 percentage point. It suggests that the value added tax on books was partly shifted to capital. Although wages are rigid, employees bear, to some extent, the burden of the value added tax. The regressions allow concluding that an increase of the value added tax rate of 1 percentage point leads to a reduction in the average wage in book publisher companies in the range 0,84% - 0,92%.
Authors and Affiliations
Arkadiusz Bernal
Keywords
Related Articles
- EP ID EP544354
- DOI -
- Views 142
- Downloads 0
IPOs in the U.S. from 2005 to 2015: Using the Spline Regression Technique to Estimate Aggregate Issuance and Performance
The objective of this paper was to explore the relationship between IPO returns and performance on the U.S. Equity Exchanges from 2005 to 2015. To conduct this analysis, we used two independently drawn samples, a primary...
Inflation Targeting and Variability of Money Market Interest Rates Under a Zero Lower Bound
The paper presents a formal framework of money market interest rates variability under a zero lower bound in a monetary policy strategy of inflation targeting. The potential factors influencing the variability of money m...
Quantifying the Effects of the CNB's Exchange Rate Commitment: A Synthetic Control Method Approach
In this paper I evaluate the quantitative effects of the Czech National Bank’s commitment to keep the Koruna from appreciating that were put in place in 2013. I focus on the policy’s impact on output, unemployment, and i...
Historical Analysis of Monetary Policy Reaction Functions: Do Real-Time Data Matter?
This paper investigates the differences between parameter estimates of monetary policy reaction functions using real-time data and those using revised data. The model is a New Keynesian DSGE model of the Czech, Hungarian...
Forecasting Exchange Rate Volatility: The Case of the Czech Republic, Hungary and Poland
We study various models for forecasting one-day forward volatility of the exchange rates of the Czech koruna, Hungarian forint and Polish zloty against the euro. We used high-frequency data to calculate realized volatili...