Policy
Development Impact Week 2023
See my talk on how using large administrative data provides a better lens for governments to design public policy
Selected Policy Notes & Report
VAT Cashback Programs in Practice: The Case of Devolve-ICMS in Rio Grande do Sul, Brazil
This note describes the Devolve-ICMS program, an innovative VAT cashback initiative aimed at refunding taxes to low-income households in the state of Rio Grande do Sul, Brazil. Using administrative records, the authors document several stylized facts about the workings of the program. First, even the poorest households sometimes consume in formal stores. Second, as a share of reported income, lower income families consume relatively more on average. Third, 60 percent of households only receive a flat cash transfer, unrelated to their formal consumption–this highlights the trade-offs in generosity vs. incentivizing formal consumption. Finally, formal consumption is substantially higher for female headed households and for participants in a concurrent lottery program that also incentivizes formal consumption.
Income Taxation of the Top Earners in Honduras: Linking Personal and Corporate Taxes
This note examines the effective income tax rates of top earners in Honduras, using a novel approach that links personal and corporate income tax data. This comprehensive income measure, achieved through collaboration with the Honduras Tax Authority (SAR), reveals a crucial link between the design of personal and corporate income taxes. The findings indicate that over 50% of total comprehensive income for the top 0.05% of earners comes from undistributed corporate profits, while distributed capital income accounts for less than 15%. The effective tax rate (ETR) for the top 0.01% of earners hovers around 25%, which is relatively flat compared to the significant drop observed in high-income countries. This is attributed to Honduras’s flat corporate income tax rate of 25% aligning with the highest marginal rate for personal income.
Offshore Data Leaks and Tax Enforcement in Developing Countries
The past decade has witnessed a rapid increase in data leaks from tax havens, spanning from the Luxembourg Leaks to revelations in the Panama and Pandora Papers. While these leaks often prompt political investigations into politicians with offshore accounts and calls from civil society for greater transparency in corporate ownership, they also serve as valuable resources for tax authorities investigating cross-border tax evasion and avoidance. To illustrate this point, this note analyzes three country cases—Ecuador, Honduras, and Senegal—where the authors closely collaborated with national tax administrations. It documents the distribution of offshore company formation across jurisdictions for shareholders and ultimate beneficial owners, as well as the relative prevalence of these countries in the overall dataset published by the International Consortium of Investigative Journalists (ICIJ) in its Offshore Leaks Database (OLD). Finally, policy recommendations are provided for enhancing personal income tax enforcement.
Firms’ Networks Under Export Exemption Regimes: Stylized Facts from Honduras
This report uses administrative tax data on firm-to-firm trade in Honduras to evaluate the degree of integration between firms receiving export-oriented tax exemptions and the local economy. We present five stylized facts regarding firms’ trade networks in Honduras and show that, across several dimensions, the networks of firms in export-oriented regimes do not differ from those of other similarly sized firms. Our findings challenge the idea that export-oriented regimes benefit firms with no connections to the local economy.
Gender and Property Taxes in São Paulo
This knowledge note provides new evidence on property ownership and taxation patterns across genders in São Paulo (Brazil), the largest city in the Americas, with 12 million inhabitants. We exploit microdata on all commercial and residential properties to document the share of total property and property wealth owned by women, the geographic distribution of female-owned properties, and the implications of this data for property taxes in the city.
Guatemala, Home-Grown School Feeding Programme: Pilot Impact Evaluation
This pilot impact evaluation employed a lean impact evaluation approach, using a randomized controlled trial (RCT) design to assess whether the introduction of the app had any impacts on meals distributed by schools (such as quality, quantity, delivery and diversity of meals). Findings from the pilot impact evaluation indicate that overall, the usage of the app was low. Despite school training participation being high (99 percent of schools having representatives attend at least one training session) only 12 percent posted a purchase order and only 7 percent completed a purchase on the app. The main reasons given for not using the app were internet connectivity issues and functionality issues. Only 24 percent of the registered suppliers attended the SFMA training (which was a requirement to receive the login credentials to access the app). App usage was low even among the suppliers who attended the training: only 15 percent of the training participants attempted to use the app, and only 4 percent of the suppliers reported completing an offer on the app successfully.