The Distributional Impact of the Fiscal System in Albania

In a context of fiscal consolidation and the need to deliver on a structural reform agenda, policy makers in Albania must not lose sight of the critical redistributive role of the fiscal system, particularly its impact on poverty and inequality. Us...

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Main Authors:	Davalos, Maria E., Robayo-Abril, Monica, Shehaj, Esmeralda, Gjika, Aida
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2018
Subjects:	FISCAL TRENDS INCOME DISTRIBUTION STRUCTURAL REFORM REDISTRIBUTION POVERTY INEQUALITY TAX POLICY INCIDENCE ANALYSIS INDIRECT TAX VALUE ADDED TAX TAXATION
Online Access:	http://documents.worldbank.org/curated/en/602351521551184290/The-distributional-impact-of-the-fiscal-system-in-Albania http://hdl.handle.net/10986/29496

id	okr-10986-29496
recordtype	oai_dc
spelling	okr-10986-294962021-06-08T14:42:45Z The Distributional Impact of the Fiscal System in Albania Davalos, Maria E. Robayo-Abril, Monica Shehaj, Esmeralda Gjika, Aida FISCAL TRENDS INCOME DISTRIBUTION STRUCTURAL REFORM REDISTRIBUTION POVERTY INEQUALITY TAX POLICY INCIDENCE ANALYSIS INDIRECT TAX VALUE ADDED TAX TAXATION In a context of fiscal consolidation and the need to deliver on a structural reform agenda, policy makers in Albania must not lose sight of the critical redistributive role of the fiscal system, particularly its impact on poverty and inequality. Using household survey data, this paper estimates the redistributive effect of fiscal policy on income distribution and poverty in Albania, assessing the individual and combined effects of taxes and public social spending. The findings show that the fiscal system in Albania plays a positive role in reducing inequality. Yet, it has a moderate poverty-increasing effect. Specifically, taxes and social protection contributions have a poverty-increasing effect; indirect taxes, particularly the value-added tax, account for the largest increases in poverty. This effect is somewhat compensated by direct government transfers, which are pro-poor and equalizing, but are not large enough to offset fully the negative impact on the taxation side. Ongoing reforms aimed at improving the efficiency and targeting of social assistance can contribute to enhancing the pro-poor impact of the fiscal system. 2018-03-20T15:38:52Z 2018-03-20T15:38:52Z 2018-03 Working Paper http://documents.worldbank.org/curated/en/602351521551184290/The-distributional-impact-of-the-fiscal-system-in-Albania http://hdl.handle.net/10986/29496 English Policy Research Working Paper;No. 8370 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Europe and Central Asia Albania
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	FISCAL TRENDS INCOME DISTRIBUTION STRUCTURAL REFORM REDISTRIBUTION POVERTY INEQUALITY TAX POLICY INCIDENCE ANALYSIS INDIRECT TAX VALUE ADDED TAX TAXATION
spellingShingle	FISCAL TRENDS INCOME DISTRIBUTION STRUCTURAL REFORM REDISTRIBUTION POVERTY INEQUALITY TAX POLICY INCIDENCE ANALYSIS INDIRECT TAX VALUE ADDED TAX TAXATION Davalos, Maria E. Robayo-Abril, Monica Shehaj, Esmeralda Gjika, Aida The Distributional Impact of the Fiscal System in Albania
geographic_facet	Europe and Central Asia Albania
relation	Policy Research Working Paper;No. 8370
description	In a context of fiscal consolidation and the need to deliver on a structural reform agenda, policy makers in Albania must not lose sight of the critical redistributive role of the fiscal system, particularly its impact on poverty and inequality. Using household survey data, this paper estimates the redistributive effect of fiscal policy on income distribution and poverty in Albania, assessing the individual and combined effects of taxes and public social spending. The findings show that the fiscal system in Albania plays a positive role in reducing inequality. Yet, it has a moderate poverty-increasing effect. Specifically, taxes and social protection contributions have a poverty-increasing effect; indirect taxes, particularly the value-added tax, account for the largest increases in poverty. This effect is somewhat compensated by direct government transfers, which are pro-poor and equalizing, but are not large enough to offset fully the negative impact on the taxation side. Ongoing reforms aimed at improving the efficiency and targeting of social assistance can contribute to enhancing the pro-poor impact of the fiscal system.
format	Working Paper
author	Davalos, Maria E. Robayo-Abril, Monica Shehaj, Esmeralda Gjika, Aida
author_facet	Davalos, Maria E. Robayo-Abril, Monica Shehaj, Esmeralda Gjika, Aida
author_sort	Davalos, Maria E.
title	The Distributional Impact of the Fiscal System in Albania
title_short	The Distributional Impact of the Fiscal System in Albania
title_full	The Distributional Impact of the Fiscal System in Albania
title_fullStr	The Distributional Impact of the Fiscal System in Albania
title_full_unstemmed	The Distributional Impact of the Fiscal System in Albania
title_sort	distributional impact of the fiscal system in albania
publisher	World Bank, Washington, DC
publishDate	2018
url	http://documents.worldbank.org/curated/en/602351521551184290/The-distributional-impact-of-the-fiscal-system-in-Albania http://hdl.handle.net/10986/29496
_version_	1764469497788366848

The Distributional Impact of the Fiscal System in Albania

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