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Roy Bahl:

Sally Wallace:

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Over the past decade, a number of countries have shifted to single-rate tax systems with broader bases and lower rates. In the U.S., there continues to be discussion of the merits of a consumption tax, and of base-broadening reforms to the income tax system. The objective of this paper is to demonstrate how, over time, a conventional income tax could be converted to a flat-rate consumption tax in a developing country. The value of this analysis, we hope, comes with the use of a real-world situation (Jamaica), which allows us to focus on the detail that determines the feasibility of transitioning to a flat-rate tax on consumption. Our main contribution is to show the conditions under which the switch can be revenue-neutral.


Originally published in:

Bahl, Roy, and Sally Wallace. “From Income Tax to Consumption Tax? The Case of Jamaica.” FinanzArchiv / Public Finance Analysis 63, no. 3 (2007): 396–414.

Posted with the permission of the publisher. (c) Mohr Siebeck GmbH

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