Delalibera, Bruno R.Ferreira, PedroGomes, DiegoSoares, Johann2025-02-242024-06-010165-1889https://hdl.handle.net/2445/219140This 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 7.9% of GDP and 1.8% of welfare. Just eliminating VAT rate dispersion leads to a 6.0% increase in GDP. Due to propagation effects, in 10 sectors direct taxes increased but output and profits did not fall.26 p.application/pdfengcc-by-nc-nd (c) Elsevier B.V., 2024http://creativecommons.org/licenses/by-nc-nd/4.0/Reforma fiscalProducte interior brutBrasilTax reformGross domestic productBrazilinfo:eu-repo/semantics/article7487232025-02-24info:eu-repo/semantics/embargoedAccess