Value-added taxation and Economic Efficiency : Evidence from Tunisian Experience

Economic theory suggests that the value-added tax (VAT) is an efficient taxation system, which largely explains its rapid adoption across the world. However, there is no empirical evidence confirming this prediction in the case of Tunisia, and only a few studies exist for developing countries. In this study, we estimate the efficiency gains from the introduction of VAT using the synthetic control method. These results indicate that VAT has a positive and economically significant effect on economic efficiency, although the magnitude of this effect remains modest. These findings are robust across a range of placebo tests and sensitivity analyses.