Better VAT for Both Explicit and Implicit Financial Fees

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Authors: Guillermo Peña
Cited by: 1
References: 24

Abstract

Abstract Recently, several countries have initiated reforms on their VAT regimes to include financial services, following the emergence of various methods for taxing both implicit and explicit fees. This article provides a theoretical and empirical analysis of these reforms. While exempting financial services from VAT, or taxing only Explicit Fees and Commissions (EFCs), tends to generate excessive income and private consumption, the comprehensive taxation of both implicit and explicit fees within Financial and Insurance Services (FIS) leads to more sustainable outcomes. Specifically, this approach enhances the price visibility of public services, thereby fostering a reduction in public expenditure.

Fields of Study & Subjects

Taxation and Compliance Studies Financial Literacy Pension Retirement Analysis Gender Labor and Family Dynamics

Publication details

Journal / source
Public Budgeting &amp Finance
Publisher
Wiley
Publication date
30 March 2026
Language
EN