[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/9171.html
   My bibliography  Save this paper

The Distributive Impact of Taxes and Expenditures in Colombia

Author

Listed:
  • Jairo,Nunez
  • Olivieri,Sergio Daniel
  • Parra,Julieth
  • Pico,Julieth
Abstract
Colombia has reduced extreme poverty in the past 16 years by almost half, moderate poverty by 22 percentage points, and made more than four million Colombians jump the threshold of multidimensional poverty. However, it remains one of the most unequal countries in the region, after Brazil and Panama. Fiscal policy is one of the instruments that allow governments to speed up the decline in inequality levels and reduce poverty. This study presents an exhaustive and comprehensive analysis of the distributional impacts of taxes and expenditures in Colombia in 2017. It makes a methodological comparison with the Commitment to Equity, which was previously implemented, and includes multiple improvements in the methodology. The results suggest that the combined effect of taxes and social spending in Colombia contributes to poverty reduction between 0.3 and 2.6 percentage points for US$5.5 and US$3.2 per day per person respectively, while inequality is reduced by almost one Gini point. Taxes and direct transfers, as well as indirect transfers, are progressive and pro-poor, while indirect taxes are regressive and contribute to an increase in inequality. Finally, transfers in-kind for education and health services are progressive and contribute to the reduction of inequality.

Suggested Citation

  • Jairo,Nunez & Olivieri,Sergio Daniel & Parra,Julieth & Pico,Julieth, 2020. "The Distributive Impact of Taxes and Expenditures in Colombia," Policy Research Working Paper Series 9171, The World Bank.
    • Handle: RePEc:wbk:wbrwps:9171
    as

    Download full text from publisher

    File URL: http://documents.worldbank.org/curated/en/486571583244394872/pdf/The-Distributive-Impact-of-Taxes-and-Expenditures-in-Colombia.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Inchauste Comboni,Maria Gabriela & Militaru,Eva, 2018. "The distributional impact of taxes and social spending in Romania," Policy Research Working Paper Series 8565, The World Bank.
    2. Nora Lustig, 2017. "The Impact of Taxes and Social Spending on Income Distribution and Poverty in Latin America. An Application of the Commitment to Equity (CEQ) Methodology," Working Papers 1714, Tulane University, Department of Economics.
    3. Moller, Lars Christian, 2012. "Fiscal policy in Colombia : tapping its potential for a more equitable society," Policy Research Working Paper Series 6092, The World Bank.
    4. Lars Christian Moller, 2012. "Fiscal Policy in Colombia," World Bank Publications - Reports 26883, The World Bank Group.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Luis Armando Galvis-Aponte & Jaime Bonet-Morón & Leonardo Bonilla-Mejía & Andrea Otero-Cortés & Gerson Javier Pérez-Valbuena & Christian Posso & Diana Ricciulli-Marín, 2021. "Desigualdades del ingreso en Colombia: ¿cuáles son sus determinantes y cómo se han afectado por la pandemia del Covid-19?," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, issue 101, pages 1-53, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Richard M. Bird & Eric M. Zolt, 2014. "Taxation and inequality in the Americas: Changing the fiscal contract?," Chapters, in: Richard M. Bird & Jorge Martinez-Vazquez (ed.), Taxation and Development: The Weakest Link?, chapter 7, pages 193-237, Edward Elgar Publishing.
    2. Facundo Alveredo & Juliana Londoño Vélez, 2013. "High incomes and personal taxation in a developing economy: Colombia 1993-2010," Commitment to Equity (CEQ) Working Paper Series 12, Tulane University, Department of Economics.
    3. World Bank, 2014. "Towards Sustainable Peace, Poverty Eradication, and Shared Prosperity [Hacia la paz sostenible, la erradicación de la pobreza y la prosperidad compartida : notas de política: Colombia]," World Bank Publications - Reports 21037, The World Bank Group.
    4. Leonardo Fabio Morales & Carlos Medina, 2017. "Assessing the Effect of Payroll Taxes on Formal Employment: The Case of the 2012 Tax Reform in Colombia," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2017), pages 75-124, November.
    5. Facundo Alveredo & Juliana Londoño Vélez, 2013. "High incomes and personal taxation in a developing economy: Colombia 1993-2010," Commitment to Equity (CEQ) Working Paper Series 1312, Tulane University, Department of Economics.
    6. Víctor Mauricio Castaneda Rodríguez, 2014. "El gasto social como factor que favorece una mayor dependencia del IVA. Un análisis para el caso colombiano," Revista Ecos de Economía, Universidad EAFIT, June.
    7. Arturo Antón, 2014. "The effect of payroll taxes on employment and wages under high labor informality," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-23, December.
    8. Isabelle Joumard & Juliana Londoño Vélez, 2013. "Income Inequality and Poverty in Colombia - Part 1. The Role of the Labour Market," OECD Economics Department Working Papers 1036, OECD Publishing.
    9. Facundo Alvaredo & Juliana Londoño Vélez, 2014. "Altos ingresos e impuesto de renta en Colombia, 1993-2010," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 16(31), pages 157-194, July-Dece.
    10. Bird, Richard M. & Zolt, Eric M., 2015. "Fiscal Contracting in Latin America," World Development, Elsevier, vol. 67(C), pages 323-335.
    11. Lustig, Nora & Martinez Pabon, Valentina & Pessino, Carola, 2023. "Fiscal Policy, Income Redistribution, and Poverty Reduction in Latin America," IDB Publications (Working Papers) 13193, Inter-American Development Bank.
    12. Lustig, Nora & Lopez-Calva, Luis F. & Ortiz-Juarez, Eduardo, 2013. "Declining Inequality in Latin America in the 2000s: The Cases of Argentina, Brazil, and Mexico," World Development, Elsevier, vol. 44(C), pages 129-141.
    13. Lustig, Nora & Martinez Pabon, Valentina & Pessino, Carola, 2023. "Fiscal policy, income redistribution, and poverty reduction in Latin America," LSE Research Online Documents on Economics 120683, London School of Economics and Political Science, LSE Library.
    14. Emily Nell & Martin Evans & Janet Gornick, 2016. "Child Poverty in Middle-Income Countries," LIS Working papers 666, LIS Cross-National Data Center in Luxembourg.
    15. Dorina Lazar & Cristian Marius Litan, 2024. "Inequality, Growth, and Structural Transformation: New Evidence from a Post-communist Economy," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 66(2), pages 236-260, June.
    16. Nga Thi Viet Nguyen & Ivica Rubil, 2021. "Fiscal Policies, Inequality, and Poverty in Croatia," Working Papers 2104, The Institute of Economics, Zagreb.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:9171. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.