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:

November 2020
Fiscal and Public Health Impact of a Change in Tobacco Excise Taxes in Ghana
by Ama Pokuaa Fenny, Aba Obrumah Crentsil, Christian Kwaku Osei & Felix Ankomah Asante

Cigarettes have generally become less affordable over time in developed economies, with increased taxes and low income growth, but more affordable in developing countries, where there have been minimal changes in taxes (Chaloupka et al. 2019). Studies by the WHO suggest that 80% of the world’s smokers live in low- and middle-income countries (LMICs), and…

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Fiscal and Public Health Impact of a Change in Tobacco Excise Taxes in Ghana
by Ama Pokuaa Fenny, Aba Obrumah Crentsil, Christian Kwaku Osei & Felix Ankomah Asante

This paper predicts the fiscal and public health outcomes from a change in the excise tax structure for cigarettes in Ghana. More than 5,000 people are killed by diseases caused by tobacco every year in Ghana (Tobacco Atlas 2018). Currently the country has a unitary tax administration approach, with a uniform ad valorem tax structure…

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How Can Governments of Low-Income Countries Collect More Tax Revenue?
by Mick Moore & Wilson Prichard

In this chapter, Moore and Prichard provide two different kinds of answers to the question of how governments of developing countries can increase tax revenues. First, they discuss seven potential revenue sources that governments of developing countries tend to use less than they should. Mining, tobacco and alcohol, the incomes and wealth of rich people,…

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Thick claims and thin rights: Taxation and the construction of analogue property rights in Lagos
by Tom Goodfellow & Olly Owen

The importance of tenure security for development and wellbeing is often reduced to questions about how titles can guarantee rights, overlooking the contested and layered nature of property rights themselves. We use the case of Lagos to analyse property rights as ‘analogue’ rather than ‘digital’ in nature – things that only exist by degree, where…

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Tax Compliance of Wealthy Individuals in Rwanda
by Jalia Kangave, Kieran Byrne & John Karangwa

Increasing emphasis is being placed on the need for low income countries to collect more tax revenue. In parallel, the need for equitable tax systems is also gaining prominence. While African countries have made remarkable progress in increasing tax collections, taxation in many African countries is inequitable in various respects. For example, many revenue authorities…

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May 2020
De-Linking Tobacco Taxation and Illicit Trade in Africa
by Max Gallien

Smoking tobacco has been much less common traditionally in Africa than in Europe or North America. But this is changing. As Africa has become a growth market for the tobacco industry, adverse health effects are increasingly visible. While increasing tobacco taxation has been shown as the most effective policy tool in curbing tobacco consumption, many…

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July 2019
The Economics of Tobacco Control in Nigeria: Modelling the Fiscal and Health Effects of a Tobacco Excise Tax Change
by Precious C. Akanonu, Joseph Ishaku & Chukwuka Onyekwena

This paper examines the potential for changes in the tobacco tax to contribute to raising government revenues, reducing tobacco use, and improving public health in Nigeria. Specifically, it estimates the impact of a change in the excise tax structure and level on cigarette consumption, government revenue, smoking prevalence, net-of-tax (NOT) revenue, and the excise tax…

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Tax, Politics, and the Social Contract in Africa
by Wilson Prichard

Though traditionally thought of as the preserve of technical experts—lawyers, economists and accountants—the study of taxation has recently attracted growing attention, with mounting recognition that taxation is fundamentally political, and lies near the core of the relationship between states and citizens. The first, and most common, question about the politics of taxation is: what are…

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Improving Tax and Development Outcomes: What Next for Civil Society Engagement?
by Wilson Prichard

Recent years have seen a dramatic surge in international attention to the importance of revenue raising in developing countries, spurred by: (a) the need for revenues to fund investments critical to the achievement of the sustainable development goals, (b) growing concern with increasing inequality, and (c) the possibility that expanded taxation may offer a platform…

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

This ICTD Research in Brief is a two-page summary of ICTD Working paper 81 by Olav Lundstøl. This series is aimed at policy makers, tax administrators, fellow researchers and anyone else who is big on interest and short on time. The paper examines the resource rent literature and findit a complicated basis for assessing revenue…

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Blogs:

November 2020
by Vanessa van den Boogaard

Though education is a core duty of the state, public education in Sierra Leone is financed not only by the formal government budget and off-budget aid, but also by informal contributions, taxes, and fees paid by households. Since independence in 1961, the state has consistently supported the ideal of universal free primary education, though in…

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November 2020
by Fariya Mohiuddin & Ruvimbo Chidziva

During the summer of 2020, the International Budget Partnership (IBP) and the International Centre for Tax and Development (ICTD) worked collaboratively to conduct a broad scan of civil society organisations (CSOs) working in the taxation space with a specific interest in domestic taxation. Our objective was to create a comprehensive picture of the emerging field,…

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September 2020
by Anna Custers, Benjamin Holzman, Raul Felix Junquera-Varela & Roel Dom

Amid the Covid-19 pandemic, changes that might ordinarily take a few years are now occurring in the span of just a few months. The uptake of e-commerce and the adoption of video-conferencing, for example, have increased rapidly. This distinctive feature of crises—that they can accelerate otherwise slow-moving trends—can be harnessed by those seeking to create…

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Research Projects:

Current Project
Tobacco tax reform in West Africa
Project Researchers: Prof Corné van Walbeek, REEP, Dr Hana Ross, REEP, Prof Abdoulaye Diagne, CRES, Dr Pape Yona Mané, CRES & Kisten van der Zee, REEP

Explore our new page on tobacco taxation Purpose Africa is vulnerable to the tobacco industry. It has a large and young population, rapid economic growth, a desire to attract foreign investment, and weak tobacco control policies. Although smoking prevalence in many African countries is modest, preventing its rise, especially amongst youth, remains a huge challenge….

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Current Project
The fiscal and public health impact of a change in tobacco excise taxes in Ghana
Project Researchers: Ama Fenny, University of Ghana, Felix Asante, Aba Crentsil & Christian Osei

This study will provide evidence-based analysis of tobacco taxation in Ghana. The main research theme addressed will be to assess best practices in tobacco taxation centering on the impact of tobacco tax increases on the retail price of tobacco products, tobacco consumption and government tax revenue. We hypothesize that this will provide the evidence needed…

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Past Project
Estimating the Impact of Tax or Price Measures on Tobacco Smoking Onset and Cessation
Project Researchers: Precious Akanonu

This study seeks to contribute to the scant literature on the impact of prices on smoking onset and cessation in LMICs by investigating the following research questions, with a focus on Nigeria: What is the impact of cigarette prices on smoking onset? What is the impact of cigarette prices on smoking cessation? The study is…

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