The impact of VAT on income inequality in ASEAN
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Abstract
The paper aims to find empirical evidence of the impact of Value Added Tax (VAT) on income inequality in ASEAN countries. Using the estimation methods for panel, the results show that the impact of VAT increases the overall inequality in the surveyed countries. Then, the paper uses the quaternary regression to divide the sample into two groups: low income inequality countries and high income inequality countries. The results of quantile regression show that the impact of VAT on income inequality is the difference between conutries with high income inequality and low income inequality. Specificall , VAT impacts positively income inequality in countries with low income inequality, while VAT is strong enough to reduce income inequality in high income inequality countries.
Article Details
Keywords
Value Add Tax, income inequality, ASEAN
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