Tax systems under fiscal adjustment
Subtitle: a dynamic CGE analysis of the Brazilian tax reform
By: prepared by Victor Duarte Lledó.
Contributors: International Monetary Fund. Finance Dept.
Series: IMF working paper -- WP/05/142
Publisher: International Monetary Fund, Finance Dept.
Published: 2005
Place of publication: Washington, D.C
Language: eng
Number of pages: 33
Subjects: Taxation -- Brazil -- Econometric models.; Fiscal policy -- Brazil -- Econometric models.
Description: 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.
Notes: "July 2005."

Includes bibliographical references (p. 31-33).

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