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Advancing Inclusive Growth in Cambodia
Author:
Mr. Niels-Jakob H Hansen
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Albe Gjonbalajnull

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Series:
IMF Working Papers
Volume/Issue:
Volume 2019: Issue 187
Language:
English
Publication Date:
06 Sep 2019
DOI:
https://doi.org/10.5089/9781513510552.001
ISBN:
9781513510552
ISSN:
1018-5941
Pages:
25
Keywords:
WP; GDP; Gini coefficient; property taxation; GDP share; income boost; equality trade-off; GDP growth; income from self-employment; property income; Income; Personal income; Income inequality; Consumption; Income distribution; Southeast Asia
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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We evaluate the impact of fiscal reforms on growth and inequality in Cambodia using a calibrated general equilibrium model with heterogeneous agents (Peralta-Alva et al., 2018). Over the last two decades, Cambodia’s consumption inequality and poverty have declined. However, income inequality is higher, and large gaps remain between urban and rural residents. At the same time, domestic revenue mobilization has improved substantially, but collection of tax revenue is biased towards non-progressive sources. We use the model to evaluate the growth and inequality impact of reforms that increase infrastructure spending by raising (i) VAT, (ii) property tax, or (iii) personal income tax. We find that using property taxes delivers the largest increase in GDP and reduction in inequality. Reaping the gains from property taxation will however require additional investments in tax administration.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2019: Issue 187