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

Jon Jellema (), Nora Lustig (), Astrid Haas () and Sebastian Wolf ()
Additional contact information
Jon Jellema: Commitment to Equity Institute
Astrid Haas: International Global Centre
Sebastian Wolf: Overseas Development Institute

No 53, Commitment to Equity (CEQ) Working Paper Series from Tulane University, Department of Economics

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 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, while 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.

Keywords: fiscal incidence; poverty; inequality; fiscal policy; Uganda (search for similar items in EconPapers)
JEL-codes: D31 D63 H22 H23 I38 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev
Date: 2016-08
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Published in Commitment to Equity Institute, August 2016, pages 1-45

Downloads: (external link)
http://repec.tulane.edu/RePEc/ceq/ceq53.pdf Revised version, 2017 (application/pdf)

Related works:
Working Paper: The Impact of Taxes, Transfers, and Subsidies on Inequality and Poverty in Uganda (2017) Downloads
Working Paper: The impact of taxes, transfers, and subsidies on inequality and poverty in Uganda (2016) Downloads
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