The Relationship Between VAT Base Expansion and Intergovernmental Fiscal Relations from the Perspective of the Dual Processes of Industrialisation and Urbanisation

Abstract:     
In this paper, the relationship between VAT base-expansion and intergovernmental financial relations is discussed from the perspective of the dual processes of industrialisation and urbanisation.

First, this article theoretically analyses the VAT base-expansion and its real world implications and then evaluates the intergovernmental fiscal relationship.

Lastly, an empirical simulation of the effect of base-expansion on local fiscal revenue and expenditure in this dual process is performed. Based on this conclusions are drawn and relevant policy suggestions are put forward.

Number of Pages in PDF File: 18

Keywords: VAT base expansion, inter-governmental financial relations

JEL Classification: H00, H2, H3, K34

Accepted Paper Series