Mongolia : Distributional Impact of Taxes and Transfers
This paper uses Mongolia's Household Socio Economic Survey for 2016 to estimate the distributive impact of taxes and transfers. The findings show that the system is progressive and contributes to reductions in poverty and inequality. The Gini...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/628471541441796614/Mongolia-Distributional-Impact-of-Taxes-and-Transfers http://hdl.handle.net/10986/30845 |
| Summary: | This paper uses Mongolia's
Household Socio Economic Survey for 2016 to estimate the
distributive impact of taxes and transfers. The findings
show that the system is progressive and contributes to
reductions in poverty and inequality. The Gini coefficient
of the pre-tax-and-transfer income is 0.4183 and decreases
to 0.3507 after-tax-and-transfer. This is a reduction of
6.76 Gini points (around 16 percent). Something similar
happens with the poverty rate, which decreases from 47.31 to
31.96 percent. Despite the progressiveness of the whole
system, there are some caveats and policy warnings. First,
pensions are the most redistributive instrument in the
system, but their actuarial and fiscal sustainability is
weak. Second, two programs (the child money program and the
mortgage subsidy) do little redistribution -- the latter is
actually regressive -- but represent a large share of the
budget (around 2.5 percent of gross domestic product). These
two factors, and the fact that up to a 35 percent of total
expenditures in monetary and in-kind transfers is funded by
corporate taxes and royalties -- which are highly dependent
on volatile commodity prices—make the redistributive impact
of the tax-and-transfer system susceptible to fiscal unsustainability. |
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