Illicit Schemes: Fossil Fuel Subsidy Reforms and the Role of Tax Evasion and Smuggling

doi:10.1596/1813-9450-9907

Publication:
Illicit Schemes: Fossil Fuel Subsidy Reforms and the Role of Tax Evasion and Smuggling

dc.contributor.author	Hosoe, Nobuhiro
dc.contributor.author	Rentschler, Jun
dc.date.accessioned	2022-01-27T13:40:41Z
dc.date.available	2022-01-27T13:40:41Z
dc.date.issued	2022-01
dc.description.abstract	This study develops a computable general equilibrium model for Nigeria, which accounts for informality, tax evasion, and fuel smuggling. By studying the impact of fuel subsidy reform on consumption, tax incidence, and fiscal efficiency, it shows that the presence of illicit activities substantially strengthens the argument in favour of subsidy reform: First, fuel subsidy reform can shift the tax base to energy goods, which are less prone to tax evasion losses than for instance labour. Second, by reducing price differentials with neighbouring countries, subsidy reform reduces incentives for fuel smuggling. Overall, the results show that considering illicit activities reduces the welfare losses of fuel subsidy reform by at least 40 percent. In addition, fuel subsidy reductions (and by extension energy tax increases) have a strong progressive distributional impact. The findings hold under different revenue redistribution mechanisms, in particular uniform cash transfers and the reduction of pre-existing labour taxes.	en
dc.identifier	http://documents.worldbank.org/curated/undefined/631951642691400564/Illicit-Schemes-Fossil-Fuel-Subsidy-Reforms-and-the-Role-of-Tax-Evasion-and-Smuggling
dc.identifier.doi	10.1596/1813-9450-9907
dc.identifier.uri	https://hdl.handle.net/10986/36878
dc.language	English
dc.publisher	World Bank, Washington, DC
dc.relation.ispartofseries	Policy Research Working Paper;No. 9907
dc.rights	CC BY 3.0 IGO
dc.rights.holder	World Bank
dc.rights.uri	http://creativecommons.org/licenses/by/3.0/igo
dc.subject	FUEL SUBSIDY
dc.subject	TAX EVASION
dc.subject	SMUGGLING
dc.subject	CGE MODEL
dc.title	Illicit Schemes	en
dc.title.subtitle	Fossil Fuel Subsidy Reforms and the Role of Tax Evasion and Smuggling	en
dc.type	Working Paper	en
dc.type	Document de travail	fr
dc.type	Documento de trabajo	es
dspace.entity.type	Publication
okr.crossref.title	Illicit Schemes: Fossil fuel subsidy reforms and the role of tax evasion and smuggling
okr.date.disclosure	2022-01-20
okr.date.doiregistration	2025-04-10T10:37:39.904633Z
okr.date.lastmodified	2022-01-20T00:00:00Z	en
okr.doctype	Publications & Research
okr.doctype	Publications & Research::Policy Research Working Paper
okr.docurl	http://documents.worldbank.org/curated/undefined/631951642691400564/Illicit-Schemes-Fossil-Fuel-Subsidy-Reforms-and-the-Role-of-Tax-Evasion-and-Smuggling
okr.guid	631951642691400564
okr.identifier.doi	10.1596/1813-9450-9907
okr.identifier.externaldocumentum	090224b088c9737a_1_0
okr.identifier.internaldocumentum	33709135
okr.identifier.report	WPS9907
okr.imported	true	en
okr.language.supported	en
okr.pdfurl	http://documents.worldbank.org/curated/en/631951642691400564/pdf/Illicit-Schemes-Fossil-Fuel-Subsidy-Reforms-and-the-Role-of-Tax-Evasion-and-Smuggling.pdf	en
okr.region.administrative	Africa
okr.region.administrative	Africa Western and Central (AFW)
okr.region.country	Nigeria
okr.topic	Law and Development::Tax Law
okr.topic	Macroeconomics and Economic Growth::Taxation & Subsidies
okr.topic	Public Sector Development::Tax Administration
okr.unit	GGSVP Chief Economist (GGSCE)
relation.isAuthorOfPublication	30005afb-5036-51b6-b3fb-626d539c298a
relation.isAuthorOfPublication.latestForDiscovery	30005afb-5036-51b6-b3fb-626d539c298a
relation.isSeriesOfPublication	26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery	26e071dc-b0bf-409c-b982-df2970295c87

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