scholarly journals The Welfare Comparison of Ad-Valorem Tax and Specific Tax with Both Quality and Quantity Choice of a Consumer

2017 ◽  
Vol 07 (06) ◽  
pp. 1797-1813 ◽  
Author(s):  
Takuya Obara ◽  
Shuichi Tsugawa
Keyword(s):  
Ad Valorem Tax ◽  
Welfare Comparison ◽  
Specific Tax ◽  
Quantity Choice ◽  
Ad Valorem

scholarly journals Measuring the effects of the new ECOWAS and WAEMU tobacco excise tax directives

2020 ◽  
pp. tobaccocontrol-2020-055843
Author(s):  
Jean Tesche ◽  
Corne Van Walbeek
Keyword(s):  
Simulation Models ◽  
West African ◽  
Retail Price ◽  
Ad Valorem Tax ◽  
Excise Tax ◽  
Tobacco Tax ◽  
The Impact ◽  
Specific Tax ◽  
Ad Valorem ◽  
Cigarette Prices

BackgroundIn December 2017, the 15-member ECOWAS (Economic Community of West African States) and the 8-member WAEMU (West African Economic and Monetary Union, a subset of ECOWAS) passed new Tobacco Tax Directives. Both Directives increased the minimum ad valorem excise tax rate to 50%. In addition the ECOWAS Directive introduced a minimum specific tax (US$ 0.02/stick), but the WAEMU Directive did not. This paper examines the likely effects of these new Directives on cigarette prices, sales volumes and revenues.MethodTax simulation models using comparable data were constructed for each of the 15 countries to estimate the effects of the ECOWAS and WAEMU Directives.ResultsIf the 15 ECOWAS members implement the ECOWAS Directive it would substantially increase the retail price of cigarettes (unweighted average 51%, range: 12% to 108%), decrease sales volumes (22%, range: −8% to −39%) and increase tax revenue (373%, range: 10% to 1243%). The impact of the WAEMU Directive on WAEMU countries’ cigarette prices (unweighted average +2%), sales volumes (−1%) and revenue (+17%) is likely to be minimal.ConclusionsThe 2017 ECOWAS Directive, which adds a specific excise tax per pack, along with an increase in the ad valorem tax, substantially improves its members’ cigarette tax structure. The specific tax overcomes the weakness of the ad valorem excise tax, since it does not depend on import or ex-factory values, which comprise only a small part of the retail price in ECOWAS countries. We recommend that WAEMU countries adopt the ECOWAS Directive, rather than the WAEMU Directive.

scholarly journals Development of average prices of cigarettes with regard to taxation changes in 2001–2009 in the Czech Republic

2009 ◽  
Vol 57 (6) ◽  
pp. 51-64
Author(s):  
Petr David ◽  
Milan Palát
Keyword(s):  
Czech Republic ◽  
Tax Reform ◽  
Average Price ◽  
Ad Valorem Tax ◽  
Tobacco Products ◽  
The Czech Republic ◽  
Factors Affecting ◽  
Economic Interpretation ◽  
Specific Tax ◽  
Ad Valorem

In the Czech Republic, excises and thus also cigarette excise were put into effect by a tax reform in 1993. In comparison with the standard taxation of other tobacco products by a specific tax the ci­ga­ret­te taxation is atypical. Through the combination of a specific tax and an ad valorem tax a combined excise was imposed on cigarettes. Over the years, many changes occurred in the cigarette excise in the Czech Republic. This paper provides the calculation of an average price of cigarettes both weighted and unweighted, which is adjusted for amounts of all taxes imposed on cigarettes in the Czech Republic in 2001 to 2009 or in 2004 to 2008. On the basis of identified values an economic interpretation was carried out with regard to other possible factors affecting selling prices of cigarettes in the Czech Republic.

The Unintended Consequences of Tax Policy: How Mississippi's Ad Valorem Tax Structure Led to Environmental Devastation

2020 ◽  
Vol 47 (1) ◽  
pp. 75-85
Author(s):  
William H. Black
Keyword(s):  
20Th Century ◽  
Unintended Consequences ◽  
Tax Structure ◽  
Ad Valorem Tax ◽  
Timber Industry ◽  
Mill Operator ◽  
Clear Cutting ◽  
Environmentally Sensitive ◽  
Land Holdings ◽  
Ad Valorem

ABSTRACT This is a story in two parts. The first describes the timber industry and the ad valorem tax structure in Mississippi during the first several decades of the 20th century. The second introduces Ran Batson, an entrepreneur and lumber mill operator, whose history illustrates the adverse consequences of the Mississippi ad valorem tax as it inspired extensive clear-cutting of forests and resulting devastation. Fortunately, the Mississippi tax structure has subsequently changed to a more favorable approach, and in the last several years of his life, Ran Batson learned the benefits possible from managing his land holdings in a more environmentally sensitive manner.

A welfare comparison of ad valorem and unit tax regimes

2015 ◽  
Vol 23 (1) ◽  
pp. 140-157 ◽  
Author(s):  
Magnus Hoffmann ◽  
Marco Runkel
Keyword(s):  
Unit Tax ◽  
Tax Regimes ◽  
Welfare Comparison ◽  
Ad Valorem

scholarly journals Tax efficiency in a model of endogenous markups

SERIEs ◽  
2019 ◽  
Vol 10 (3-4) ◽  
pp. 401-418
Author(s):  
Esra Durceylan
Keyword(s):  
Firm Heterogeneity ◽  
Consumer Preferences ◽  
Consumer Surplus ◽  
Consumer Welfare ◽  
Tax Revenue ◽  
Aggregate Productivity ◽  
Ad Valorem Tax ◽  
Unit Taxes ◽  
Efficiency Comparison ◽  
Ad Valorem

Abstract Efficiency comparison of ad valorem and unit taxes has been traditionally based on consumer welfare. However, if the tax instrument also affects the distribution of firms over their productivities, the policy maker may be concerned about the implications on aggregate productivity as well. This paper makes an efficiency comparison of ad valorem and unit taxes by allowing the distribution of firms to respond to changes in policy. First, I make an efficiency comparison in a model with monopolistically competitive firms that are homogenous with respect to their productivity levels. Consumer preferences exhibit love for variety and allow firms to adjust their markups. I find that ad valorem tax is more efficient. Allowing for firm heterogeneity overturns this result at high revenue requirements. As the tax rate increases, ad valorem tax causes excessive exit of firms which makes the market more competitive. Hence, few surviving firms price lower by decreasing their markups. Lower prices decrease the tax revenue collected. As a result under ad valorem tax regime, higher consumer surplus is dominated by lower tax revenue. On the other hand, production is concentrated among relatively more productive firms. Thus, aggregate productivity is higher under ad valorem tax regime.

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