The Value Added Tax Incidence – the Case of the Book Market in CEE Countries

Arkadiusz Bernal


Conducting effective economic policy requires understanding of how taxes are shifted. The value added tax rates on books in the Czech Republic, Hungary, Poland and Slovakia in 2003 - 2012 differed much and changed several times, hence it was a good case for exploring the tax incidence. The main objective of the article is to answer the question to whom (consumers, capital, labour) and to what extent the burden of the value added tax on books was shifted. Although the tax is often classified as a consumption tax, the tax on books wasn't shifted to consumers at least within five months after a tax rate change. The research suggests that the tax is shifted to capital and labour. According to the econometric models, an increase of the value added tax rate on books of 1 percentage point leads to a decrease of the return on equity of book publishers between 0,43 and 0,76 percentage point. It suggests that the value added tax on books was partly shifted to capital. Although wages are rigid, employees bear, to some extent, the burden of the value added tax. The regressions allow concluding that an increase of the value added tax rate of 1 percentage point leads to a reduction in the average wage in book publisher companies in the range 0,84% - 0,92%.
Author Arkadiusz Bernal (WZ / KFP)
Arkadiusz Bernal,,
- Department of Corporate Finance
Journal seriesFinance A Uver-Czech Journal of Economics and Finance, ISSN 0015-1920, (A 15 pkt)
Issue year2018
Publication size in sheets1
Keywords in English tax incidence, value added tax, book market
ASJC Classification1402 Accounting; 2002 Economics and Econometrics; 2003 Finance
Languageen angielski
Score (nominal)15
Score sourcejournalList
ScoreMinisterial score = 15.0, 08-04-2020, ArticleFromJournal
Publication indicators WoS Citations = 0; Scopus SNIP (Source Normalised Impact per Paper): 2018 = 0.527; WoS Impact Factor: 2017 = 0.563 (2) - 2017=0.631 (5)
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* presented citation count is obtained through Internet information analysis and it is close to the number calculated by the Publish or Perish system.
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