Tax Revenues in Low-Income Countries

• 成果类型: Article
• 署名作者: Peralta-Alva, Adrian; Tam, Xuan S.; Tang, Xin; Tavares, Marina M.
• 署名单位: International Monetary Fund; City University of Hong Kong; Wuhan University
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1093/ej/uead023
• 发表日期: 2023
• 页码: 2001-2024
• 关键词: taxation; RISK; consumption; informality; DYNAMICS

摘要

We quantitatively investigate the welfare costs of increasing tax revenues in low-income countries. We consider three tax instruments: consumption, labour income and capital income taxes. The analysis is based on a general equilibrium model featuring heterogeneous agents, incomplete financial markets, and rural and urban areas. We calibrate the model to Ethiopia and decompose the welfare costs into their aggregate and distributional components. We find that changing taxes alter the composition of demand. This, together with limited labour mobility, causes the incidence of higher taxes to fall disproportionately on the rural population, regardless of the instrument. Consumption taxes are the instrument with the largest welfare loss.