Tax transition in developing countries: do value added tax and excises really work?

This paper investigates the role of Value Added Tax (VAT) and excises in first wave tax transition (movement away from international trade taxes towards domestic revenue collection) developing countries. Focusing on a sample 96 countries over period 1985–2013, we investigate whether adoption VAT enables to increase likelihood succeeding transition. Results indicate that having VAT, allows probability by 12%. We further extent which offset losses liberalization these Our estimates reveal is offsetting 52% with U relationship, while this effect holds for duties inverted relationship. The study also points out heterogeneities (while VAT-tax robust African Asian countries, it seems not Latin American countries), as well asymmetries (the collection didn’t face an tax). While enhancing administration fosters process however suggests taking closer attention powerful tools