Incidencia del impuesto al valor agregado en los precios en Colombia

Abstract

This paper empirically estimates the pass-through of the value-added tax (VAT) on Colombian consumer prices. The identification strategy uses the consumer price index and takes advantage of the relatively frequent tax reforms that have taken place recently in Colombia. The results suggest that the pass-through for the consumer basket is about one at the national level. We also consider a specification where the goods are treated individually (hence not taking into account their weight in the consumer basketand where we control for unobservable city characteristics. The results in this case show a lower average pass-through and bring to the fore the heterogeneity of the VAT incidence across markets.