Poverty-Decreasing Indirect Tax Reforms: Evidence from Tunisia
AbstractThis paper suggests a methodology to identify socially-desirable directions for poverty-alleviating tax reforms. The cost-benefit ratio of increasing any commodity-tax rate is derived from the minimization of a poverty measure subject to a revenue requirement for the government. Further, to avoid the arbitrariness of choosing a poverty line and a poverty measure, the search for a poverty-reducing tax reform is done "robustly", among other things by increasing progressively the ethical content of a pre-defined class of poverty measures. The methodology is illustrated using data from Tunisia. The results suggest that poverty could be dropped for a large class of poverty indices and a wide range of poverty lines by raising -at constant fiscal revenue- the subsidy rate on hard wheat and mixed oils and by decreasing the one on sugar and milk.
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Bibliographic InfoPaper provided by CIRPEE in its series Cahiers de recherche with number 0403.
Date of creation: 2004
Date of revision:
Poverty alleviation; Indirect taxation; Targeting; Tunisia;
Other versions of this item:
- Sami Bibi & Jean-Yves Duclos, 2007. "Poverty-decreasing indirect tax reforms: Evidence from Tunisia," International Tax and Public Finance, Springer, vol. 14(2), pages 165-190, April.
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
- I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
- I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-02-08 (All new papers)
- NEP-EDU-2004-02-08 (Education)
- NEP-LTV-2004-02-08 (Unemployment, Inequality & Poverty)
- NEP-MIC-2004-02-08 (Microeconomics)
- NEP-PBE-2004-02-08 (Public Economics)
- NEP-PUB-2004-02-15 (Public Finance)
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