The Distributive Impact of Fiscal Policy in Cameroon: Tax and Benefit Incidence

PEP PMMA Working Paper No. 2006-16

43 Pages Posted: 17 Aug 2006 Last revised: 1 May 2018

See all articles by Johannes Tabi Atemnkeng

Johannes Tabi Atemnkeng

University of Buea

Tafah Akwi

International Development Research Centre (IDRC) - Poverty and Economic Policy (PEP) Research Network

Etoh Anzah

International Development Research Centre (IDRC) - Poverty and Economic Policy (PEP) Research Network

Date Written: June 1, 2006

Abstract

Most fiscal incidence studies neither analyze simultaneously the tax and benefit incidence (simply known as net fiscal incidence) nor actually relate poverty indices to fiscal impact. This paper jointly and separately examines the redistributive and poverty effects of the tax and transfer (education and health) systems in Cameroon. Broadly speaking, the tax system is generally progressive but less so when compared with the benefits of education and health. The net tax system is found to reduce inequality. Interestingly, while overall public spending on education and health are most progressive in rural areas, followed by semi-urban and urban areas, the opposite is true for tax incidence. Tax burden weighs more on the urban, followed by the rural and semi-urban, population. When we consider the two sets of policies together, they are found to mainly reflect fiscal policies in that they are more progressive and poverty-reducing when we use relative poverty lines in rural areas, followed by semi-urban and urban areas, respectively. Though we also realized a poverty-increasing effect of the net tax system using absolute poverty lines, the poverty impact still remains minimal in the rural areas where poverty is high and inequality actually increased between 1996 and 2001 than in urban areas.

Overall, the current government policy can help, however, by making sure that the tax burdens of the poor are nil or very low and that the composition and direction of public expenditures on education and health favor the poor.

Keywords: Fiscal policy, taxes, public expenditures, incidence, inequality, poverty, Cameroon

JEL Classification: F15, H2, H51, H52, H22, I32, I31

Suggested Citation

Atemnkeng, Johannes Tabi and Akwi, Tafah and Anzah, Etoh, The Distributive Impact of Fiscal Policy in Cameroon: Tax and Benefit Incidence (June 1, 2006). PEP PMMA Working Paper No. 2006-16, Available at SSRN: https://ssrn.com/abstract=923602 or http://dx.doi.org/10.2139/ssrn.923602

Johannes Tabi Atemnkeng (Contact Author)

University of Buea ( email )

Faculty of Social and Management Sciences
Buea, 63
Cameroon
237677783049 (Phone)

Tafah Akwi

International Development Research Centre (IDRC) - Poverty and Economic Policy (PEP) Research Network ( email )

Canada

Etoh Anzah

International Development Research Centre (IDRC) - Poverty and Economic Policy (PEP) Research Network ( email )

Canada

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
261
Abstract Views
1,863
Rank
213,292
PlumX Metrics