The distributional effects of indirect taxes in Portugal

• Autor(a) principal: Araújo, Ana Margarida Chaves
• Data de Publicação: 2019
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10362/66382
• topic: Tax progressivity; Public finance; Microsimulation; Indirect taxes; Portugal; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

In this work project, we use micro-level data from the Household Budget Survey waves of 2005, 2010 and 2015 to analyze the evolution and measure the extent of progressivity of two main components of the indirect tax system in Portugal: VAT and excise duties. By means of an analysis of income deciles, we observe variations in the composition of households' expenditure per tax level and per commodity aggregate. According to the income-based Kakwani progressivity index and to pro- gressivity curves, the global indirect tax system in Portugal can be considered to be regressive. The graphical decomposition into tax components reveals that this is due to a regressive VAT structure. Our ndings also suggest that the use of the reduced VAT rate in itself has a redistributive impact.