3.7 Revenue Growth after VAT Adoption, by Size

Coverage Scenario

FIGURE 3.7 Revenue Growth after VAT Adoption, by Size

Source: Original figure produced for this publication. Note: The figure plots the counterfactual size growth after vAT adoption using the estimated model. vAT = value added tax.

at the same tax rate, the share of inputs from formal suppliers rises to 78 percent, and the share of output going to formal buyers rises to 48 percent. Varying the VAT tax rate (the informality-neutral rate or the revenue-neutral rate) does not substantially affect the magnitude of the change.

3.7 Revenue Growth after VAT Adoption, by Size

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