Essama-Nssah, B.2012-06-042012-06-042007-06https://hdl.handle.net/10986/7071The difficulties faced by many developing countries in raising revenue from direct taxes have forced them to rely heavily on indirect taxes to finance development interventions. The purpose of this paper is to show how to identify socially desirable options for commodity taxation in the context of a poverty reduction strategy. Within the logic of social evaluation the author assesses tax options on the basis of value judgments underlying members of the additively separable class of poverty measures. The criterion hinges on both the pattern of consumption of each commodity and the price elasticity of the poverty measure used. An application of this methodology to data for Guinea shows that many components of food expenditure (particularly cereals, grains, and roots) would be good candidates for exemption from value-added tax. Even though expenditure on health and education is distributed in favor of the non-poor, their importance for human capital development argues for a program of targeted subsidies in a broader context of cost recovery.CC BY 3.0 IGOABSOLUTE VALUEADMINISTRATIVE COSTSAGGREGATE DEMANDAGGREGATE POVERTYBENCHMARKBUDGET DEFICITSCAPITAL ACCUMULATIONCOMPETITIVE MARKETSCONSUMER PRICESCUMULATIVE DISTRIBUTIONCUMULATIVE DISTRIBUTION FUNCTIONDEBTDECOMPOSABLE POVERTYDECOMPOSABLE POVERTY MEASURESDENSITY FUNCTIONDEVELOPING COUNTRIESDEVELOPMENT INTERVENTIONSDEVELOPMENT REPORTDEVELOPMENT STRATEGIESDISTRIBUTIONAL IMPACTECONOMIC ACTIVITIESECONOMIC GROWTHECONOMIC INEQUALITYECONOMIC POLICYECONOMIC THEORYECONOMICSECONOMICS LETTERSEMPIRICAL SECTIONEXPENDITURE CUTSFISCAL POLICYFIXED PRICESFOOD COMMODITIESFOOD EXPENDITUREFOOD ITEMSFOOD SUBSIDIESGDPGDP PER CAPITAGROWTH ELASTICITYHEADCOUNT POVERTYHEADCOUNT RATIOHEALTH EXPENDITURESHOUSEHOLD LEVELHOUSEHOLD LEVEL DATAHOUSEHOLD SURVEYHUMAN CAPITALHUMAN DEVELOPMENTIMPACT OF POLICIESIMPROVING GOVERNANCEINCOMEINCOME GROWTHINCOME INEQUALITYINCOME POVERTYINCREASE POVERTYINDICATOR OF POVERTYINDIVIDUAL WELFAREINEQUALITYINTERNATIONAL COMMUNITYINTERNATIONAL TRADELIVESTOCK PRODUCTSLORENZ CURVEMARGINAL BENEFITSMARGINAL COSTMARGINAL TAXMARGINAL UTILITYMICROECONOMIC ANALYSISMONETARY POLICIESOPTIMIZATIONPOLICY CHANGEPOLICY OBJECTIVEPOLICY OPTIONSPOLICY RESEARCHPOLICY RESEARCH WORKING PAPERPOLICY RESPONSEPOORPOOR POLICYPOVERTY ALLEVIATIONPOVERTY ERADICATIONPOVERTY FOCUSPOVERTY GAPPOVERTY IMPACTPOVERTY INCIDENCEPOVERTY INCREASEPOVERTY INDICATORPOVERTY INDICESPOVERTY LINEPOVERTY MEASUREPOVERTY MEASURESPOVERTY OUTCOMESPOVERTY PROFILEPOVERTY REDUCTIONPOVERTY REDUCTION STRATEGYPOVERTY REDUCTION STRATEGY PAPERPOVERTY STATUSPRICE ELASTICITYPRICE ELASTICITY OF DEMANDPRO-POORPRO-POOR GROWTHPRODUCTION EFFICIENCYPROGRESSPUBLIC EXPENDITURESPUBLIC FUNDSPUBLIC POLICYPUBLIC SECTORPUBLIC SPENDINGREAL INCOMERECREATIONREDUCTION IN POVERTYRESPECTRURALRURAL PHENOMENONRURAL POPULATIONSOCIAL IMPACTSOCIAL POLICYSOCIAL SUPPORTSOCIAL WELFARESQUARED POVERTY GAPSTATISTICAL ANALYSISTARGETINGTAXATIONTRADE LIBERALIZATIONTRANSPORTATIONURBAN CENTERSUTILITY FUNCTIONUTILITY FUNCTIONSVALUE ADDEDVALUE JUDGMENTSVEGETABLESVULNERABLE SEGMENTSWEALTHWELFARE IMPACTWorld Bank10.1596/1813-9450-4245