Publication:
The Effects of Taxes and Transfers on Inequality and Poverty in Pakistan

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dc.contributor.authorAmjad, Beenish
dc.contributor.authorCarassco, Haydeeliz
dc.contributor.authorMeyer, Moritz
dc.date.accessioned2025-04-24T21:31:29Z
dc.date.available2025-04-24T21:31:29Z
dc.date.issued2025-04-24
dc.description.abstractThis study assesses the impact of fiscal policy in Pakistan - taxes, social expenditures, and subsidy expenditures - on poverty and inequality using the Commitment to Equity (CEQ) Methodology. Results show that fiscal policy increased the national poverty headcount and left inequality largely unchanged during fiscal year 2019 (spanning July 1, 2018, to June 30, 2019). The net effect of the fiscal system is to increase the poverty headcount ratio at the national poverty line by approximately two percentage points. Overall, the combination of direct and indirect taxes paid, cash or near-cash transfers received, and subsidy benefits captured leaves most households as net payers into the fiscal system; only the poorest decile are net recipients in cash terms from the fiscal system. Taxes, transfers, and subsidies have a muted impact on inequality: the Gini coefficient index falls from 29.0 to 28.6 from pre-fiscal to post-fiscal income. The most effective expenditure-side instrument for either poverty or inequality reduction is the BISP social protection program; the revenue-side instruments that shield poor and vulnerable households most effectively are the personal income tax and the urban property tax. The revenue-side instrument most effective at reducing inequality is the personal income tax. Indirect taxes and subsidy expenditures – which are far larger in fiscal magnitude than direct taxes or social transfers (respectively) in Pakistan in fiscal year 2019 – are not particularly effective at reducing poverty or inequality. In-kind transfers of public health and education services also have an insignificant impact on inequality.en
dc.identifierhttp://documents.worldbank.org/curated/en/099041525134040424
dc.identifier.doihttps://doi.org/10.1596/43125
dc.identifier.urihttps://hdl.handle.net/10986/43125
dc.languageEnglish
dc.language.isoen_US
dc.publisherWashington, DC: World Bank
dc.rightsCC BY-NC 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by-nc/3.0/igo
dc.subjectFISCAL POLICY
dc.subjectSOCIAL EXPENDITURE
dc.subjectTAXES
dc.subjectFISCAL INCIDENCE
dc.subjectINEQUALITY
dc.subjectPOVERTY
dc.subjectPAKISTAN
dc.titleThe Effects of Taxes and Transfers on Inequality and Poverty in Pakistanen
dc.typeReport
dspace.entity.typePublication
okr.date.disclosure2025-04-24
okr.date.doiregistration2025-04-26T02:21:19.555654Z
okr.date.lastmodified2025-04-18T16:02:31Zen
okr.doctypeEconomic & Sector Work::Other Poverty Study
okr.doctypeEconomic & Sector Work
okr.docurlhttp://documents.worldbank.org/curated/en/099041525134040424
okr.guid099041525134040424
okr.identifier.docmidP178348-67f30493-ae19-4ab5-8c6d-58c55014d4c2
okr.identifier.externaldocumentum40007144
okr.identifier.internaldocumentum40007144
okr.identifier.report200486
okr.import.id7226
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttps://documents.worldbank.org/curated/en/099041525134040424/pdf/P178348-67f30493-ae19-4ab5-8c6d-58c55014d4c2.pdfen
okr.region.administrativeSouth Asia
okr.region.countryPakistan
okr.sectorFY17 - Social Protection
okr.sectorSocial Protection
okr.themeFY17 - Economic Growth and Planning,FY17 - Inclusive Growth,FY17 - Data production, accessibility and use,FY17 - Data Development and Capacity Building,FY17 - Institutional strengthening and capacity building
okr.themeFY17 - Economic Policy,FY17 - Public Sector Management
okr.topicMacroeconomics and Economic Growth::Taxation & Subsidies
okr.topicMacroeconomics and Economic Growth::Income
okr.topicSocial Protections and Labor::Social Protections & Assistance
okr.topicPoverty Reduction::Inequality
okr.unitEFI-SAR-POV-Poverty and Equity (ESAPV)
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