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Distribution and Poverty Impacts of Tax Structure Reform in Developing Countries: How Little We Know
Author(s) -
Gemmell Norman,
Morrissey Oliver
Publication year - 2005
Publication title -
development policy review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.671
H-Index - 61
eISSN - 1467-7679
pISSN - 0950-6764
DOI - 10.1111/j.1467-7679.2005.00279.x
Subject(s) - economics , poverty , distribution (mathematics) , tax reform , developing country , tax deferral , international economics , direct tax , value added tax , indirect tax , public economics , state income tax , gross income , economic growth , mathematical analysis , mathematics
The past two decades have witnessed widespread reforms of tax structures in developing countries. This article reviews available evidence on the effects of various taxes, and hence of tax structure reform, on distribution and the poor. Taxes on exports and goods consumed especially by the poor (e.g. kerosene) are the most consistently found to be regressive, whereas taxes on ‘luxury’ items such as cars, beverages and alcohol are the most likely to be progressive. Sales taxes are slightly more progressive, or less regressive, than taxes on imports. The reforms implemented are therefore unlikely to have worsened the effects of the tax structure on the poor.