The economic impact of using higher consumption tax rates

The main goal of the study was to estimate the total financial loss that resulted from the application of an inflated excise duty rate on flavored beer produced by Grupa Żywiec S.A. The analysis consisted of 4 main components. The first one was theoretical and presented the economic effects of using higher indirect tax rates. It was based on the theory of incidence/tax transferability. The first step allowed to set the theoretical framework and select the factors which determine the market balance of consumer goods. Based on the analytical framework, in the second component, an econometric analysis was carried out. It was followed then by the third component of the study, a simulation analysis. Results of both analysis allowed to determine the estimated financial loss of Grupa Żywiec. The whole analysis was summarized by the fourth component, which presented the results of the analysis for specific beer brands and the most important conclusions.

Project funding: PwC

Project leader: CASE – Center for Social and Economic Research