• Corpus ID: 201607403

Using Temporary VAT Cuts as Fiscal Stimuli – Evidence from the Netherlands ∗ Joke Goes

  title={Using Temporary VAT Cuts as Fiscal Stimuli – Evidence from the Netherlands ∗ Joke Goes},
  author={Egbert L W Jongen and Eric van Loon},
Can a temporary VAT cut boost economic activity during a recession? We study the effects of two temporary VAT cuts on home improvement in the Netherlands during the Great Recession, using differences-in-differences. We find full pass-through of the temporary VAT cuts into lower prices, and a substantial boost in sales of home improvement services of 10–11%. In contrast to previous studies abroad, we find limited intertemporal substitution of home improvement. Hence, rather than just bringing… 

Figures and Tables from this paper



Using a temporary indirect tax cut as a fiscal stimulus: evidence from the UK

This paper evaluates a novel form of fiscal stimulus: a temporary cut in the rate of Value Added Tax (VAT). In December 2008, the UK cut the standard rate of VAT by 2.5 percentage points for 13

Assessing the temporary VAT cut policy in the UK

This paper concerns the likely impact of a temporary VAT cut stimulus policy on consumer demand in the UK. It suggests that around 75 per cent of the VAT reduction will be passed on to consumers and

The Intertemporal Substitution and Income Effects of a VAT Rate Increase: Evidence from Japan

One of the biggest political issues in Japan is an increase in the rate of value added tax (VAT). In this paper, we evaluate its impact on household expenditure, using Japan's April 1997 VAT rate

The Economics of a Temporary VAT Cut

1. The rate of VAT has been cut temporarily to 15%, with a return to 17.5% in place for the end of 2009. The government has predicted that this will increase consumer spending by about 0.5%. Much of

Consumption Responses to Temporary Tax Incentives: Evidence from State Sales Holidays

States offer sales tax holidays (STHs) temporarily exempting items like clothes, shoes, and school supplies from the state sales tax. Spending response to these temporary tax changes are investigated

Christmas in August: Prices and Quantities During Sales Tax Holidays

This paper estimates the incidence of state sales taxes on computers by exploiting exogenous changes in tax rates due to sales tax holidays. Using scanner data that span nine tax holidays in 2007, I

Mostly Harmless Econometrics: An Empiricist's Companion

The intertemporal substitution and income effects of a consumption tax rate increase

  • Evidence from New Zealand,
  • 2012

Testimony before the Joint Economic Committee in Washington D.C

  • Fiscal stimulus issues,
  • 2008

The inefficiency of reduced VAT rates: Evidence from the restaurant industry (Working Paper)

  • 2014