Poverty-Decreasing Indirect Tax Reforms: Evidence from Tunisia

Sami Bibi () and Jean-Yves Duclos

Cahiers de recherche from CIRPEE

Abstract: This 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.

Keywords: Poverty alleviation; Indirect taxation; Targeting; Tunisia (search for similar items in EconPapers)
JEL-codes: D12 D63 H53 I32 I38 (search for similar items in EconPapers)
Date: 2004
New Economics Papers: this item is included in nep-edu, nep-ltv, nep-mic, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Journal Article: Poverty-decreasing indirect tax reforms: Evidence from Tunisia (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:lvl:lacicr:0403

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