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The role of corruption control in moderating the relationship between value added tax and income inequality

Mustapha, Mohd Zulkhairi and Koh, Eric H. Y. and Chan, Sok-Gee and Ramly, Zulkufly (2017) The role of corruption control in moderating the relationship between value added tax and income inequality. International Journal of Economics and Financial Issues, 7 (4). pp. 459-467. ISSN 2146-4138

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Abstract

This paper investigates the mediating role of the control of corruption on value added tax (VAT) and income inequality in the top 10 most corrupted countries. We employed quantile regression to capture the varying effects of income inequality. The results suggest that most corrupted countries with lower income inequality did not benefit from VAT, but they stand to gain if the income inequality is wide. VAT seems to improve the effectiveness of tax collection, which the government can allocate the higher tax revenues for social and economic programs to benefit poor people. Our finding also suggests the extent of control of corruption and the improved governance of tax collection via VAT in our sample that consists of countries with high level of corruption are not strong enough to reduce income inequality.

Item Type: Article (Journal)
Additional Information: 7002/58039
Uncontrolled Keywords: Income Inequality, Corruption, Value Added Tax
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HF Commerce
H Social Sciences > HF Commerce > HF5001 Business. Business Administration
H Social Sciences > HJ Public Finance
H Social Sciences > HJ Public Finance > HJ2240 Revenue. Taxation
Kulliyyahs/Centres/Divisions/Institutes: Kulliyyah of Economics and Management Sciences > Department of Finance
Depositing User: Dr Zulkufly Ramly
Date Deposited: 18 Aug 2017 16:02
Last Modified: 12 Jan 2018 15:09
URI: http://irep.iium.edu.my/id/eprint/58039

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