THE EQUIVALENCE BETWEEN DESTINATION AND NONRECIPROCAL RESTRICTED ORIGIN TAX REGIMES

It is now well known that destination and reciprocal restricted origin tax regimes are only equivalent under very stringent conditions. An a lternative non-reciprocal restricted origin regime is proposed and the n shown to be equivalent to the destination regime under a wide set of conditions including imperfect competition and transport costs. The p olicy implications of the result for the EC are discussed.