Title: Can export VAT rebate be passed through?
Speaker: Bo Zhou, School of International Trade and Economics, University of International Business and Economics
Abstract: The indirect tax burdens are generally assumed to be shifted fully or predominantly to buyers. Does the same logic apply to export value-added-tax (VAT) rebates? This study examines the tax incidence of export VAT rebates both empirically and theoretically. We take advantage of China's 2004 export VAT rebate as a natural experiment, and estimate the pass-through rate by employing the difference-in-differences method. Combining the comprehensive product-level data from China Customs (2003-2004) and detailed export rebate rate information, we find that exporters bear 100% of the export VAT rebate burden. We further show that this reduction of export VAT rebates significantly lowers export quantities and values. We then develop a theoretical model examining the tax incidence of export rebates from one country. This model rationalizes our empirical finding that the export VAT rebate burden cannot be shifted to foreign buyers. Our paper provides an insights into the distributional effects of export tax rebate policies.
Zoom Meeting: https://anu.zoom.us/j/89714593301?pwd=T71qJPv5aLhvTnZiRBLkDaQRlYbj80.1
Meeting ID: 897 1459 3301, Password: 720738