Tax, Welfare and Inequality

Image credit: © Johnny Miller, Goya Bauwens

Tax policy and tax administration can have a big impact on who does or does not pay their fair share, on economic incentives, and thus on levels of poverty and the distribution of income and welfare. Research under this theme focuses on developing a better understanding, in specific contexts, of the complex economic and political linkages between how governments tax, how their national economies perform, and how well their citizens live. Some of our specific concerns are: the taxation of high net worth individuals; efficient business taxation; and the taxation of socially-harmful activities like smoking tobacco.

Publications:

June 2018
Revenue Sharing in Mining in Africa: Empirical Proxies and Determinants of Government Take
by Olav Lundstøl

Revenues from mining constitute a significant development opportunity, particularly in income-poor but resource-rich countries in Africa. However, there is limited knowledge regarding the extent to which such countries have benefitted from the recent global mineral boom from 2003-2013. This paper finds existing approaches to testing rent theory to be a complicated basis for the assessment…

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June 2018
What Might an Agenda for Equitable Taxation Look Like?
by Wilson Prichard

The notion of tax equity raises difficult questions. There is no single right definition of the term, and it is very hard to measure precisely the distributional effects of taxation and fiscal activities, especially in low-income countries. This brief seeks to clarify definitions, evidence and points of potential disagreement when it comes to tax equity, and puts forward eight key elements of a potential agenda for equitable taxation.

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June 2018
Chapter 13: Taxation and Development
by Mick Moore

In many discussions of nations’ development, we often focus on their economic and social development. Is it becoming wealthier? Is its society modernizing? Is it becoming more technologically sophisticated? Are social outcomes improving for the broad mass of the public? The process of development policy implementation, however, is always and inevitably political. Put simply, regime…

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Integrating Tax Challenges of Local Market Traders in International Tax Justice Campaigns
by Kas Sempere

This research in brief is a summary of ICTD Working Paper 80 by Kas Sempere : In the broad sense, ‘tax justice’ explores pro-poor and redistributive tax systems able to reduce inequality. It involves a transparent process of pro-poor collection (those who have less, pay less) and pro-poor expenditure (those who have less, receive more),…

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Tax Unrest Among Market Traders: The Local Side of ActionAid’s International Tax Justice Campaign in Nigeria
by Kas Sempere

Tax justice has become a popular concept, and a number of international tax justice campaigns have exposed aspects such as the unfairness of tax havens and harmful tax breaks. Yet, the idea of tax justice at the local level is less well-known. The impact of campaigns to end tax havens and harmful tax competition may…

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Tax in Development: Towards a Strategic Aid Approach
by Olav Lundstøl

Raising a higher share of the value added in an economy for the public purpose is associated with state building, modern economic growth and development. From 2002-3 to date, low- and lower-middle income countries raised total tax and non-tax revenue from 11-12 per cent and 18-19 per cent of GDP up to 17-18 per cent…

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February 2018
Taxing High Net Worth Individuals: Lessons from the Uganda Revenue Authority’s Experience
by Jalia Kangave, Susan Nakato, Ronald Waiswa, Milly. I. Nalukwago & Patrick Lumala Zzimbe

This brief examines the experience of Uganda in increasing tax compliance from wealthy individuals, compares its approach to that of other countries’ tax authorities, and draws lessons that they can learn from each other.

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January 2018
What Can We Learn from the Uganda Revenue Authority’s Approach to Taxing High Net Worth Individuals?
by Jalia Kangave, Susan Nakato, Ronald Waiswa, Milly Nalukwago & Patrick Lumala Zzimbe

This paper examines the experience of Uganda in increasing tax compliance from wealthy individuals, compares its approach to that of other countries’ tax authorities, and draws lessons that they can learn from each other.

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February 2017
Private Wealth and Public Revenue in Latin America: Business Power and Tax Politics
by Tasha Fairfield

Inequality and taxation are fundamental problems of modern times. How and when can democracies tax economic elites? This book develops a theoretical framework that refines and integrates the classic concepts of business’s instrumental (political) power and structural (investment) power to explain the scope and fate of tax initiatives targeting economic elites in Latin America after…

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December 2016
Linking taxation and social protection: Evidence on redistribution and poverty reduction in Ethiopia
by Kalle Hirvonen, Giulia Mascagni & Keetie Roelen

The reduction of poverty, and more recently inequality, are pressing concerns in many low- and middle-income countries, not in the least as a result of the Sustainable Development Goals committing countries to significant improvements by 2030. Redistribution is important for reaching these goals, and is shaped by countries’ tax and welfare systems. Despite redistribution resulting…

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Blogs:

May 2018
by Eric Zolt & Jason Oh

Interest in wealth taxes has spiked recently due to disclosures of tax-haven abuses by the ultra-wealthy (the Panama Papers in April 2016 and the Paradise Papers in November 2017) and new empirical work on rising wealth inequality in countries around the world. These developments have led many to consider comprehensive wealth taxes as a potential…

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April 2017
by Jalia Kangave

For the past twenty years, Maama Sula (let’s say) has run a small fast-food restaurant in a town called Wandegeya in Kampala, Uganda. She sources the bulk of her supplies from the women in the nearby market. Because her business is relatively well-established, she pays income taxes and Value Added Tax (VAT) to the central…

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February 2017
by Bill Savedoff

Last November, I got a birthday gift from the International Monetary Fund: my very own copy of “How to Design and Enforce Tobacco Excises?” I don’t blame you for missing it—it came out 5 days before the US election. I was quite pleased to see it. I’ve been asking for an IMF statement on tobacco…

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