In order to evaluate the impact of VAT revenue on consumption, investment, gross domestic product, price level and unemployment rate in Taiwan, this study construct a macro-econometrics model with two types of VAT rates and three types of government expenditures. Simulation results show that if the government reduces its debts with the additional taxes resulting from the increased VAT rates, the positive benefits are the most significant.
JEL Classification: H25, E17
ISBN 9789865795467
Publication：Chung-Hua Institution for Economic Research
