Measuring Incidence of Goods and Services Tax on the Households of New Zealand
16 Pages Posted: 22 Apr 2011
Date Written: April 21, 2001
This paper measures the income distributional effects of Goods and Services Tax (GST) in Newzealand. For this purpose the interrelation ship among household consumption income, disposable income, expenditure and tax paid at the adult equivalent scale were estimated by using multi variate regression analysis. The empirical findings reveal that the overall impact of GST on the basis of estimating tax elasticities with respect to household expenditure is almost proportional and turns out to be mildly progressive when household expenditure is adjusted with size. The impact of GST is appears to be regressive when it is estimated with respect to disposable income.
Keywords: Goods and Services Tax, Household consumption income, Disposable income, Expenditure, New Zealand
JEL Classification: C13, H31
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