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The Impact of Taxes, Transfers, and Subsidies on Inequality and Poverty in Uganda

Author

Listed:
  • Jon Jellema

    (Commitment to Equity Institute)

  • Nora Lustig

    (Department of Economics, Tulane University)

  • Astrid Haas

    (International Growth Centre, Uganda)

  • Sebastian Wolf

    (International Growth Centre, Uganda)

Abstract

This paper uses the 2012/13 Uganda National Household Survey to analyze the redistributive effectiveness and impact on poverty and inequality of Uganda’s revenue collection instruments and social spending programs. Fiscal policy – including many of its constituent tax and spending elements – is inequality-reducing in Uganda, but the impact of fiscal policy on inequality is modest. The reduction of inequality due to fiscal policy in Uganda is lower than other countries with similar levels of initial inequality, a result tied to low levels of spending in Uganda generally. The impact of fiscal policy on poverty is negligible, though the combination of very sparse coverage of direct transfer programs and nearly complete coverage of indirect tax instruments means that many poor households are net payers into, rather than net recipients from, the fiscal system. As Uganda looks ahead to increased revenues from taxation and concurrent investments in productive infrastructure, it should take care to protect the poorest households from further impoverishment from the fiscal system.

Suggested Citation

  • Jon Jellema & Nora Lustig & Astrid Haas & Sebastian Wolf, 2016. "The Impact of Taxes, Transfers, and Subsidies on Inequality and Poverty in Uganda," Working Papers 1614, Tulane University, Department of Economics, revised Aug 2017.
  • Handle: RePEc:tul:wpaper:1614
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Jose Cuesta & Jon Jellema & Lucia Ferrone, 0. "Fiscal Policy, Multidimensional Poverty, and Equity in Uganda: A Child-Lens Analysis," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 0, pages 1-32.
    2. Jose Cuesta & Jon Jellema & Lucia Ferrone, 2021. "Fiscal Policy, Multidimensional Poverty, and Equity in Uganda: A Child-Lens Analysis," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(3), pages 427-458, June.
    3. Susan Namirembe Kavuma & Christine Byaruhanga & Nicholas Musoke & Patrick Loke & Michael Noble & Gemma Wright, 2020. "An analysis of the distributional impact of excise duty in Uganda using a tax-benefit microsimulation model," WIDER Working Paper Series wp-2020-70, World Institute for Development Economic Research (UNU-WIDER).
    4. Jose Cuesta & Jon Jellema & Yekaterina Chzhen & Lucia Ferrone & UNICEF Office of Research - Innocenti, 2018. "Commitment to Equity for Children, CEQ4C: Fiscal Policy, Multidimensional Poverty, and Equity in Uganda," Papers inwopa945, Innocenti Working Papers.
    5. Haydeeliz Carrasco & Hamidou Jawara & Moritz Meyer, 2022. "The Effects Of Fiscal Policy On Inequality And Poverty In The Gambia," Commitment to Equity (CEQ) Working Paper Series 117, Tulane University, Department of Economics.
    6. Damiano Kulundu Manda & Reuben Mutegi & Samuel Kipruto & Moses Muriithi & Paul Samoei & Martine Oleche & Germano Mwabu & Stephen D. Younger & Anda David, 2020. "Fiscal Incidence, Inequality and Poverty in Kenya: A CEQ Assessment," Commitment to Equity (CEQ) Working Paper Series 101, Tulane University, Department of Economics.
    7. Markina Oksana, 2022. "Taxation, Inequality, and Poverty: Evidence from Ukraine," Central European Economic Journal, Sciendo, vol. 9(56), pages 1-18, January.

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    More about this item

    Keywords

    Fiscal incidence; poverty; inequality; fiscal policy; Uganda.;
    All these keywords.

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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