Fiscal Incidence on the Island

This paper examines the distributional effects of fiscal policy in Grenada. Using data from the 2017–18 Living Conditions and Household Budgets Survey and following the Commitment to Equity analysis framework, the paper estimates the effects of fiscal policy interventions on inequality and poverty. It analyzes the distributional incidence of direct and indirect taxes, direct transfers provided by social transfers and school feeding programs, and in-kind transfers generated by public services in health and education. The results show that Grenada has a tax system that is neutral on the value-added tax side and progressive on the personal income tax side. Furthermore, direct transfers make a modest contribution to poverty reduction and are almost neutral in their distributive impact. The results contribute to the understanding of who bears the burden of taxation and benefits from transfers and of how Grenada’s fiscal system can improve its redistributive effect.

Bibliographic Details

Main Authors:	Canavire Bacarreza, Gustavo, Gómez Aliaga, Guillermo, Britton, Chevanne, Rios-Avila, Fernando, Jimenez Pozo, Wilson, Granados Ibarra, Silvia, Li, Ran
Format:	Working Paper biblioteca
Language:	English English
Published:	World Bank, Washington, DC 2024-01-29
Subjects:	FISCAL INCIDENCE, POVERTY, INEQUALITY, TAX, SOCIAL TRANSFERS, PUBLIC EXPENDITURE, PUBLIC REVENUE, FISCAL POLICY INTERVENTIONS,
Online Access:	http://documents.worldbank.org/curated/en/099315201222443333/IDU1a5a6417d1a77d14ba51b09518a83e3fc689f https://openknowledge.worldbank.org/handle/10986/40973
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