assistance to poor families. However, despite the highest degree of efficiency of the social assistance for poor families program, its overall effect on poverty reduction is relatively small, which is due to the relatively small budget allocated to this program.

Labor pensions, even though they do not represent a means-tested transfer, are also found to be moderately efficient in reducing inequality and poverty, because many of the retirees rely on pensions as their main source of income; as such, marginal effects of pensions are high despite high overall cost. This is also accentuated by demographic characteristics of the population, population aging being a salient feature.

On the tax side, the PIT was found to be the most efficient direct tax in terms of redistribution effects among all of the direct taxes, in other words, it causes the lowest increase in poverty per one dollar of tax collected. It should be noted, however, that these features of the PIT are prior to the recent tax reform, which modified the PIT design from being a progressive transfer to being a flat transfer, but with a higher non-taxable exemption. One of the key analyses for future research would be to examine how the incidence of the PIT, and its degree of efficiency with respect to poverty and inequality changed as the result of the changes in its design.

# **6. References**

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Bornukova, Kateryna, Nataliia Leshchenko, and Mikhail Matytsin. (2019). Fiscal incidence in Ukraine: a commitment to equity analysis. _Policy Research Working Paper No. 8765,_ Washington, DC: The World Bank.

<mark>Cojocaru, Alexandru, Mikhail Matytsin (2018.) Moldova Poverty and Shared Prosperity Update 2018 (English). Washington, D.C. : World Bank Group.</mark> <mark>Goraus, Karolina, and Gabriela Inchauste. (2016). The distributional impact of taxes and transfers in Poland. T</mark> he World Bank.

Inchauste, Gabriela, and Militaru, Eva. (2018). The distributional impact of taxes and social spending in Romania. The World Bank.

Joumard, Isabelle, Mauro Pisu and Debbie Bloch (2012), “Tackling income inequality: The role of taxes and transfers”, OECD Journal: Economic Studies, published online first. http://dx.doi.org/10.1787/eco_studies2012-5k95xd6l65lt Kakwani, Nanak C. Measurement of tax progressivity: an international comparison. The Economic Journal 87, no. 345 (1977): 71-80.

Lustig, Nora and Sean Higgins. (2013). Commitment to Equity Assessment (CEQ): Estimating the Incidence of Social Spending, Subsidies and Taxes. Handbook. _CEQ Working Paper 1,_ Center for Inter-American Policy and Research and Department of Economics, Tulane University and Inter-American Dialogue.

Lustig, Nora, editor. (2018). Commitment to Equity Handbook. Estimating the Impact of Fiscal Policy on Inequality and Poverty. _Brookings Institution Press and CEQ Institute_ , Tulane University.

<mark>Popova, Daria, Mikhail Matytsin, and Emily Sinnot. (2018). Distributional impact of taxes and social transfers in Russia over the downturn.</mark> _<mark>Journal of European Social Policy</mark>_ <mark>, 0958928718767608.</mark> 29