Financial assistance from the Commission of the European Communities under Contract ERBFMBI-CT95-0291 of the Marie Curie Fellowship programme and from the British Economic and Social Research Council under Contract R00429514173 of the Postgraduate Research Studentships programme is gratefully acknowledged. Part of the research is based on the final report of the project entitled ‘The Distributional Impact of the Proposed Tax Reforms on Greek Households’, to be published by the Centre for Planning and Economic Research. The authors are indebted to this institute for funding this part of the research and also to George Bekiaris, Theodore Georgakopoulos and Vassilis Rapanos for most helpful comments and suggestions. All views expressed are the sole responsibility of the authors.
Redistributive impact of indirect tax reforms: Greece, 1988–2002
Article first published online: 2 FEB 2005
Volume 25, Issue 2, pages 225–247, June 2004
How to Cite
Kaplanoglou, G. and Newbery, D. M. (2004), Redistributive impact of indirect tax reforms: Greece, 1988–2002. Fiscal Studies, 25: 225–247. doi: 10.1111/j.1475-5890.2004.tb00103.x
- Issue published online: 2 FEB 2005
- Article first published online: 2 FEB 2005
- indirect taxes;
This paper assesses the distributional impact of indirect taxes among Greek households between 1988 and 2002, a period that coincides with the introduction of significant reforms in the tax system due to EU membership. The highly differentiated indirect tax structure prevailing at the beginning of the period had distributional benefits over the more simplified 2002 tax structure. The overall inequality of the after-tax welfare distribution has increased by 6–12½ per cent and changes in the indirect tax system seem to explain about half of this increase. The paper also applies a recent method of measuring the distributional impact of relative price changes caused by changes in tax rates of commodities (Newbery, 1995) and establishes that indirect tax reforms introduced since 1988 had an adverse impact on the distribution of purchasing power, which nevertheless seems to be very small.