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Tariff and Consumption Tax Reforms in a Developing Tourism Economy

journal contribution
posted on 2014-10-01, 00:00 authored by H Beladi, Chi-Chur Chao, J-P Laffargue
This paper examines the effects of a coordinated tax reform by replacing import tariffs with point-by-point increases in consumption taxes for a small-open developing tourism economy. Foreign tourists demand for the non-traded goods provided in the informal sector of the host economy, resulting in a tourism-induced terms-of-trade effect. The presence of inbound tourism lends a support to positive tariffs even for a small open economy. The indirect tax reform of this kind can increase residents’ welfare and government revenue when the initial tariffs are relatively larger to the consumption taxes.

History

Journal

Journal of International Trade and Economic Development

Publisher

Routledge

ISSN

0963-8199

eISSN

1469-9559

Language

eng

Publication classification

C Journal article; C1 Refereed article in a scholarly journal

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