Authors: Azzeddine Azzam; Belaid Rettab
Addresses: University of Nebraska-Lincoln, Lincoln, Nebraska, 68503-0922, USA ' Economic Research and Sustainable Business, P.O. Box 1457, Dubai Chamber, Dubai, UAE
Abstract: We compute the optimal commodity tax rates and compare their associated welfare impact with the welfare impact of a uniform tax rate on UAE households with and without exempting food. Household data is used within a linear expenditure system that considers joint allocation of leisure and seven broad commodity groups. We find that households are worse off with a uniform tax when food is not taxed.
Keywords: optimal taxation; United Arab Emirates; UAE; consumer welfare; linear expenditure system; LES; commodity taxes; uniform tax rates; food exemption; optimisation; leisure.
International Journal of Economic Policy in Emerging Economies, 2015 Vol.8 No.3, pp.191 - 212
Available online: 09 Oct 2015 *Full-text access for editors Access for subscribers Purchase this article Comment on this article