Reforming Taxes and Improving Health: A Revenue-Neutral Tax Reform to Eliminate Medical and Pharmaceutical VAT

  1. Álvarez García, Santiago 2
  2. Pestana Barros, Carlos 1
  3. Prieto Rodríguez, Juan 2
  1. 1 Universidade de Lisboa
    info

    Universidade de Lisboa

    Lisboa, Portugal

    ROR https://ror.org/01c27hj86

  2. 2 Universidad de Oviedo
    info

    Universidad de Oviedo

    Oviedo, España

    ROR https://ror.org/006gksa02

Revista:
Notas técnicas: [continuación de Documentos de Trabajo FUNCAS]

ISSN: 1988-8767

Año de publicación: 2007

Número: 338

Tipo: Documento de Trabajo

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Resumen

The aim of this paper is to analyse a tax reform consisting of an increment of the indirect taxes on alcohol and tobacco to finance the elimination of VAT on health and pharmaceutical services. We first estimate an Almost Ideal Demand System for the purpose of evaluating expenditure and price elasticities. We then micro-simulate the abolition of VAT on health services combined with a increment on alcohol and tobacco excise duties, so that total revenue remains unchanged. This reform would generate small private and social welfare gains complemented with externalities derived from the tobacco and alcohol demand cut.

Fuente de los datos: Dialnet