Delalibera, Bruno R.Ferreira, PedroGomes, DiegoSoares, Johann2023-12-132023-12-132023https://hdl.handle.net/2445/204640This paper investigates the effects of a tax reform that eliminates tax rate heterogeneity and cumulative taxation using a general equilibrium model with multiple sectors with market power. Industries are connected through input-output linkages, and changes in taxation are not confined within industries. We calibrate the model to Brazil, a country with a highly distorted tax system. The revenue-neutral tax reform generates gains of 7.8% of GDP and 1.9% of welfare. Just eliminating VAT rate dispersion leads to a 5.9% increase in GDP. Due to propagation effects, in 10 sectors direct taxes increased but output and profits did not fall.41 p.application/pdfengcc-by-nc-nd, (c) Delalibera et al., 2023http://creativecommons.org/licenses/by-nc-nd/3.0/es/Reforma fiscalProducte interior brutBrasilTax reformGross domestic productBrazilinfo:eu-repo/semantics/workingPaperinfo:eu-repo/semantics/openAccess