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This paper reviews studies that attempt to measure empirically, revenue gains from tax harmonisation. Three groups of studies emerge, those that use cross-country regression, partial equilibrium analysis, and applied general-equilibrium (CGE) models—they all suggest (explicitly or implicitly) that the relationship between tax rates and tax revenues is ambiguous. In some special circumstances, there are gains that can be realized from tax harmonization, but those gains are usually modest in scope. Tax harmonization tends to disadvantage certain countries especially when the participating countries are different in size, and disparities in their initial tax structures are wide.

Additional information

Published Date

December 2017

JEL Classification

C68, D78, E16, F13, F15,H20, H25. H 87

Key words

Policy Coordination, Tax Harmonisation, Tax Revenue, Computable General Equilibrium Models, Social Accounting Matrix

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