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Value added tax and corporation tax in practice : differences between countries and knowledge for public policy

Institute for Fiscal Studies - LONDON - 2022

The aim of our project is to study the efficiency and fairness of VAT and CIT, and how the results differ from the predictions generated by theoretical models. Although VAT and CIT are theoretically strong, tax evasion, compliance costs and exemptions can make these taxes less efficient and fair. Using micro-data, we will compile a set of statistics to measure the effects of these taxes. By highlighting potential areas of inefficiency and inequity created by the tax systems in France, this project is intended to inform tax policy. This study is part of a collaborative research project with the World Bank, where we have access to tax micro-data for 14 low and middle income countries. The addition of France will enable us to use it as a benchmark tax system for a high-income country, and to compare it to tax systems in developing countries.