Macro-Distributional Implications of VAT Reform Supporting Public Investment in Cabo Verde

Key Points

• Assess the macroeconomic and distributional effects of VAT reform in Cabo Verde to finance public investment.
• Conducted macroeconomic analysis of VAT reform effects
• Evaluated fiscal space enhancement through VAT reform
• Assessed distributional impacts and the need for accompanying measures
• VAT reform can strengthen fiscal space and support economic growth
• Potential regressive nature of VAT reform highlighted
• Targeted transfers can mitigate adverse distributional effects for supporting inclusive growth