Abstract

"In the first paper I answer the research question: How do firm returns respond to changes in VAT policy? I find that there is a"surprise" factor in tax policy for markets despite the politicization of and public influence on decision making regarding taxation. That is, the average effect of an announcement of a rise in the VAT base increases firm-level returns by 0.8% compared to the average daily return of 0.06% in my sample."

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