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National Accounting Review

2020, Volume 2, Issue 1: 53-65. doi: 10.3934/NAR.2020003
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Research article

VAT experience as an influence on banking crises

  • Department of Public Economics, Universidad de Zaragoza, 250005, Zaragoza, Spain
  • Received: 09 December 2019 Accepted: 02 January 2020 Published: 06 January 2020

  • JEL Codes: G01, H25, G21, F19, F38

  • GST/VAT influences the economy by several channels. VAT does not fully apply to financial services,or these services are usually exempt on the tax,which leads to inefficiencies and could encourage banking crises. This paper employs a dataset of 36 EU and OECD countries for the period 1970–2011 and estimates panel probability models to empirically test the importance of VAT experience in banking crises. An increase of the risk of banking crises is correlated with VAT experience,as empirically checked. Therefore,GST/VAT reforms could pass by fully taxing the value added of financial services. This paper is useful for academicians,policy makers and practitioners.

    Citation: Guillermo Peña. VAT experience as an influence on banking crises[J]. National Accounting Review, 2020, 2(1): 53-65. doi: 10.3934/NAR.2020003

    Related Papers:

  • GST/VAT influences the economy by several channels. VAT does not fully apply to financial services,or these services are usually exempt on the tax,which leads to inefficiencies and could encourage banking crises. This paper employs a dataset of 36 EU and OECD countries for the period 1970–2011 and estimates panel probability models to empirically test the importance of VAT experience in banking crises. An increase of the risk of banking crises is correlated with VAT experience,as empirically checked. Therefore,GST/VAT reforms could pass by fully taxing the value added of financial services. This paper is useful for academicians,policy makers and practitioners.


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