Borradores de Economia
Number:
1281
Published:
Carlos Esteban Posadae Classification JEL:
D12, D15, D61
Keywords:
VAT exemption, household consumption, intertemporal substitution, intratemporal substitution, cost–benefit
The most recent
Julián Alonso Cárdenas-Cárdenas, Deicy Johana Cristiano-Botia, Eliana Rocío González-Molano, Carlos Alfonso Huertas-Campos
Luis E. Arango, Juan José Ospina-Tejeiro, Fernando Arias-Rodríguez, Oscar Iván Ávila-Montealegre, Jaime Andrés Collazos-Rodríguez, Diana M. Cortázar Gómez, Juan Pablo Cote-Barón, Julio Escobar-Potes, Aarón Levi Garavito-Acosta, Franky Juliano Galeano-Ramírez, Eliana Rocío González-Molano, Maria Camila Gomez Cardona, Anderson Grajales, David Camilo López-Valenzuela, Wilmer Martinez-Rivera, Nicolás Martínez-Cortés, Rocío Clara Alexandra Mora-Quiñones, Sara Naranjo-Saldarriaga, Antonio Orozco, Daniel Parra-Amado, Julián Pérez-Amaya, José Pulido, Karen L. Pulido-Mahecha, Carolina Ramírez-Rodríguez, Sergio Restrepo Ángel, José Vicente Romero-Chamorro, Nicol Valeria Rodríguez-Rodríguez, Norberto Rodríguez-Niño, Diego Hernán Rodríguez-Hernández, Carlos D. Rojas-Martínez, Johana Andrea Sanabria-Domínguez, Diego Vásquez-Escobar
Luis Armando Galvis-Aponte, Adriana Isabel Ortega-Arrieta, Adriana Marcela Rivera-Zárate
Abstract
This paper analyzes whether the policy of VAT exemption days, implemented in Colombia between 2020 and 2022 for some products and merchandise lines, had a positive effect on the consumption of such exempted goods. The evidence show an intertemporal substitution in consumption of the items that benefited from the VAT exemption policy around the months when the policy came into effect; that is, purchases of these goods decreased in the months before and after the month of the VAT-free day, on which purchases increased. Moreover, we find that the VAT exemption days have a transitory positive effect on the items covered by the policy compared with those not covered. In terms of prices, we also find evidence of a transitory reduction in prices.