Report

Colombia’s 2012 Tax Reform : Poverty and Social Impact Analysis

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collection.link.18
https://openknowledge.worldbank.org/handle/10986/2119
collection.name.18
Other Poverty Study
dc.contributor.author
World Bank
dc.date.accessioned
2017-10-12T20:42:29Z
dc.date.available
2017-10-12T20:42:29Z
dc.date.issued
2014-11
dc.description.abstract
This report summarizes the results of the PSIA and explains the three analyses used to determine the impact of the tax reform. The first analysis integrates data from administrative tax records with household statistics from the Gran Encuesta Integrada de Hogares (GEIH) conducted by the Departamento Administrativo Nacional de Estadística (DANE) to correct for the problem of underrepresentation of high-income households that is typical of household surveys. The second analysis, which is based on consumption data from the Encuesta de Calidad de Vida (ENCV) also conducted by DANE, follows the LATAX micro-simulation technique and focuses on the effect of taxes on income distribution and on government revenues on the assumption that individuals’ purchasing habits remain the same. The third analysis uses a general equilibrium model of the labor market to estimate the impact of the tax reforms on the labor market and on informality. The first analysis shows that the effects of Colombia’s income tax reform serve the intended purpose of reducing income inequality. Results based on the constructed full income distribution, which uses administrative tax records and household survey data, indicate that the Gini coefficient decreases from 0.586 to 0.579. Considering that the average yearly reduction of the Gini coefficient in Latin America over the last 10 years was 0.51 percentage points, the estimated reduction in Colombia’s Gini coefficient is not trivial. These results also demonstrate the importance of using the full income distribution to calculate true inequality in a country.
en
dc.identifier.uri
http://hdl.handle.net/10986/28530
dc.language
English
dc.language.iso
en_US
dc.publisher
World Bank, Washington, DC
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
TAXATION
dc.subject
TAX REFORM
dc.subject
DISTRIBUTIONAL IMPACT
dc.subject
POVERTY
dc.subject
INEQUALITY
dc.subject
VAT
dc.subject
NEW ALTERNATIVE INCOME TAX
dc.subject
LABOR MARKET
dc.title
Colombia’s 2012 Tax Reform
en
dc.title.subtitle
Poverty and Social Impact Analysis
en
dc.type
Report
en
okr.date.disclosure
2017-09-14
okr.doctype
Economic & Sector Work :: Other Poverty Study
okr.doctype
Economic & Sector Work
okr.docurl
http://documents.worldbank.org/curated/en/224891505457246534/Colombia-s-2012-tax-reform-poverty-and-social-impact-analysis
okr.googlescholar.linkpresent
yes
okr.identifier.externaldocumentum
090224b084fb1c6f_1_0
okr.identifier.internaldocumentum
27981696
okr.identifier.report
113600
okr.imported
true
okr.language.supported
en
okr.pdfurl
http://documents.worldbank.org/curated/en/224891505457246534/pdf/113600-WP-P113763-PUBLIC-COPSIATaxReform.pdf
en
okr.region.administrative
Latin America & Caribbean
okr.region.country
Colombia
okr.topic
Public Sector Development :: Tax Administration
okr.topic
Public Sector Development :: Public Sector Economics
okr.topic
Macroeconomics and Economic Growth :: Taxation & Subsidies
okr.topic
Poverty Reduction :: Inequality
okr.topic
Poverty Reduction :: Poverty Assessment
okr.topic
Social Development :: Poverty and Social Impact Analysis
okr.unit
LCSPP; LCSPR

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