Benefit Incidence of Fiscal Measures to Deal with the Impact on Households of the Economic Crisis in Liberia: Comparing Import and Income Taxes

Tsimpo, Clarence and Wodon, Quentin (2012): Benefit Incidence of Fiscal Measures to Deal with the Impact on Households of the Economic Crisis in Liberia: Comparing Import and Income Taxes. Published in: Poverty and the Policy Response to the Economic Crisis in Liberia, World Bank, Washington, DC (edited by Quentin Wodon) (April 2012): pp. 99-110.

Abstract

To help households cope with the recent economic crisis, and especially the increase in food prices, the government of Liberia announced a number of fiscal measures. A first measure was to implement a temporary exoneration of import duties on food products, and especially imported rice. A second measure announced by the President in her January 2009 State of the Union address was to reduce the personal income tax top rate from 35 percent to 25 percent together with an exclusion from paying income tax for all ndividuals earning less than L$54,000. This chapter provides an analysis of the consumption and income data from the nationally representative 2007 CWIQ (Core Welfare Indicator Questionnaire) survey in order to compare the likely benefit incidence of both measures. While none of the measures is well targeted to the poor, the first measure is likely to benefit the poor substantially more than the second.

• Item Type: MPRA Paper
• Language: English
• Keywords: Poverty
• Subjects: I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty > I32 - Measurement and Analysis of Poverty

References

References

Backiny-Yetna, P., R. Mungai, C. Tsimpo, and Q. Wodon. 2012. “Poverty in Liberia:Level, Profile, and Determinants.” In Q. Wodon, ed., 9–34. Poverty and the Policy Response to the Economic Crisis in Liberia. Washington, DC: World Bank.

International Labour Organization (ILO). 2009. “A Rapid Impact Assessment of the Global Economic Crisis on Liberia.” Mimeo, Monrovia.

Tsimpo, C., and Q. Wodon. 2012. “Rice Prices and Poverty in Liberia.” In Q. Wodon, ed.,85–98. Poverty and the Policy Response to the Economic Crisis in Liberia. Washington, DC: World Bank.

Wodon, Q., and H. Zaman. 2010. “Higher Food Prices in Sub-Saharan Africa: Poverty Impact and Policy Responses.” World Bank Research Observer 25: 157–176.