How pro-poor and income equitable are tourism taxation policies in a developing country? Evidence from a computable general equilibrium model

Mahadevan, Renuka, Amir, Hidayat and Nugroho, Anda (2016) How pro-poor and income equitable are tourism taxation policies in a developing country? Evidence from a computable general equilibrium model. Journal of Travel Research, . doi:10.1177/0047287516641781


Author Mahadevan, Renuka
Amir, Hidayat
Nugroho, Anda
Title How pro-poor and income equitable are tourism taxation policies in a developing country? Evidence from a computable general equilibrium model
Journal name Journal of Travel Research   Check publisher's open access policy
ISSN 0047-2875
1552-6763
Publication date 2016
Year available 2016
Sub-type Article (original research)
DOI 10.1177/0047287516641781
Open Access Status Not Open Access
Total pages 13
Place of publication Thousand Oaks, CA United States
Publisher Sage Publications
Collection year 2017
Language eng
Abstract This article highlights the impacts on poverty, income inequality, and the macroeconomic and sectoral output resulting from increases in the value-added tax and sales tax on hotels and restaurants using Indonesia as a case study. While taxing tourism-related sectors was ineffective in reducing poverty and income inequality, using tax revenue from the value-added tax as a cash transfer policy was effective and more so in rural Indonesia. Tax revenue used for infrastructural development was however limited in its impact on poverty and income distribution. Overall, the negative effects of taxation on various industries and the contraction of GDP and employment in the economy need to be mitigated. This can be done with an appropriate policy mix for the use of tax revenue between cash transfers and expenditure in education and health, with the view to address potential resource misallocation and output contraction in other industries.
Keyword Poverty incidence
Income inequality
Computable general equilibrium
Value-added tax
Sales tax
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: HERDC Pre-Audit
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Created: Wed, 06 Apr 2016, 17:23:57 EST by Alys Hohnen on behalf of School of Economics