Indonesia's Agriculture Tax: An Approach of the GTAP Model

Fitra Prasapawidya Purna


Tax is a policy tool to control the market. As Indonesia implied an agriculture tax of about 10% in 2014, it is worthy of capturing how it affects the market. This paper aims to find the effect of the implied tax on the market by seeing the country's sale, demand, import, export, and welfare. The method being used is GTAP model simulation with the base of GTAP9 and being aggregated based on the case applied.

The result shown that the tax implied makes the demand, import, and export decrease even for the country that implements it. However, the sale and welfare gained by the origin country are increasing. Even for China, the United States, and Australia have a hard time dealing with the policy as they got their welfare decreased.


Agriculture tax, GTAP model, Agricultural Economics, Agricultural International Trade


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