Uruguay : Poverty and Social Impact Assessment of the Tax Reform

The Poverty and Social Impact Assessment (PSIA) analyzes the impact of the tax reform, which came into effect in July 2007, on tax incidence and poverty in Uruguay. The essence of the reform is the introduction of a dual personal income tax, which...

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Bibliographic Details
Main Author:	World Bank
Format:	Social Analysis
Language:	English en_US
Published:	Washington, DC 2012
Subjects:	ACCOUNTING AFTER TAX INCOME AGRICULTURAL PRODUCTS ALCOHOLIC BEVERAGES ANNUAL INTEREST RATES ARBITRAGE AVERAGE PAY AVERAGE PENSIONS BALANCE SHEET BANK ACCOUNTS BANK DEPOSITS BANK POLICY BANKING ASSETS BANKING SYSTEM BEFORE TAX INCOME BUSINESS TAXES BUYERS CALCULATION CALCULATIONS CAPITAL INVESTMENTS CAPITAL MOBILITY CENTRAL BANK CONSUMER CONSUMER GOODS CONSUMERS CONSUMPTION EXPENDITURE CONSUMPTION TAX CONSUMPTION TAXES CONTRIBUTION CONTRIBUTION RATE CORPORATE INCOME TAX CORPORATE TAX CORPORATE TAX RATES CORPORATION TAX CURRENT INCOME DEBT DEDUCTIONS DEPOSIT DEPOSIT INTEREST DEPOSITS DEVELOPING COUNTRIES DIRECT TAXATION DISPOSABLE INCOME DIVIDEND DIVIDEND INCOME ECONOMIC COSTS ECONOMIC CRISIS ECONOMIC EFFICIENCY ECONOMIC MANAGEMENT EXCISE TAX EXPENDITURE EXPENDITURES FACTORS OF PRODUCTION FINANCIAL ASSETS FINANCIAL INTERMEDIATION FINANCIAL INVESTMENTS FINANCIAL SERVICES FINANCIAL SYSTEM FISCAL POSITION FLAT TAX FOREIGN CAPITAL FOREIGN CURRENCY GOVERNMENT EXPENDITURE HEALTH INSURANCE HOUSEHOLD EXPENDITURE HOUSEHOLD INCOME HOUSEHOLD INCOMES INCOME INCREASE INCOME INCREASES INCOME INEQUALITY INCOME LEVEL INCOME SOURCE INCOME SOURCES INCOME TAXES INCOMES INSURANCE INTEREST INCOME INTEREST RATES INTERNAL TAX IRA LABOR MARKET LEVEL PLAYING FIELD LOWER INCOME MACROECONOMIC VULNERABILITY MANUFACTURING INDUSTRY MARGINAL RATES MARGINAL TAX RATE MARGINAL TAX RATES MARKET PRICES MICRO DATA OPEN ECONOMIES PENSION PENSION CONTRIBUTIONS PENSION INCOME PENSION VALUES PENSIONERS PENSIONS PERSONAL INCOME PERSONAL INCOME TAX PERSONAL INCOME TAXATION PERSONAL INCOME TAXES PRIVATE INVESTMENT PROBABILITY PRODUCTIVE INVESTMENT PROGRESSIVE TAX PUBLIC DEBT PUBLIC SECTOR DEBT REAL ESTATE REAL PROPERTY REAL PROPERTY TAX REFORM PROGRAM RENTS RESEARCH ASSISTANCE RESOURCE ALLOCATION RETIREMENT RETIREMENTS SALARIES SALARY SALE SALES SAVINGS SAVINGS RATE SAVINGS RATES SELF-EMPLOYMENT SENIOR SINGLE TAX SMALL COUNTRY SOCIAL SECURITY SOCIAL SECURITY CONTRIBUTION SOCIAL SECURITY CONTRIBUTIONS SOCIAL SERVICES SURTAX TAX TAX ADMINISTRATION TAX BASE TAX BRACKETS TAX CHANGES TAX COLLECTION TAX COMPLIANCE TAX EVASION TAX EXEMPTIONS TAX INCIDENCE TAX INCREASES TAX RATE TAX RATES TAX RECEIPTS TAX REFORM TAX REFORMS TAX REGIME TAX REGIMES TAX REVENUE TAX REVENUES TAX STRUCTURE TAX STRUCTURES TAX SYSTEM TAX TREATMENT TAXATION TAXPAYERS VALUE ADDED TAX VALUE ADDED TAXES WAGE WAGES WORKING AGE YOUNG ADULTS
Online Access:	http://documents.worldbank.org/curated/en/2008/05/10046273/uruguay-poverty-social-impact-assessment-tax-reform http://hdl.handle.net/10986/7890

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Summary:	The Poverty and Social Impact Assessment (PSIA) analyzes the impact of the tax reform, which came into effect in July 2007, on tax incidence and poverty in Uruguay. The essence of the reform is the introduction of a dual personal income tax, which taxes labor income at progressive rates and capital income at lower, proportional rates. A further modification is the reduction in the revenue share of indirect taxes. The study aims to provide information to inform policy discussion on distributional implications of tax reform. In addition, it gives impetus for further more sophisticated analysis of current and proposed tax reforms. In designing a tax system, a trade-off exists between efficiency, equity and administrative simplicity. The paper focuses on one aspect of this trade-off by evaluating the equity impact of the tax reform in Uruguay. Neither the efficiency of the post-reform tax system nor the effect on tax administration is examined. Assessing the distributional impact of a tax reform is important, firstly, as there is a potential to mitigate the equity-efficiency trade-off in the design of tax structures, and secondly, as the expenditure side of the budget can then be employed to diminish any adverse distributional impacts.

Uruguay : Poverty and Social Impact Assessment of the Tax Reform

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