# **Contents**

|List of the t|ables .................................................................................................................................................................................. 3|
|---|---|
|List of the fi|gures ................................................................................................................................................................................ 3|
|1.<br>Introd|uction ............................................................................................................................................................................... 4|
|2.<br>Belaru|sian “welfare state”: Overall principles ...................................................................................................................... 5|
|2.1.|Poverty, growth incidence, and trends in inequality .................................................................................... 5|
|2.2.|Revenues and expenditures of the general government .............................................................................. 6|
||Government revenues ....................................................................................................................................... 6|
||Government expenditures ................................................................................................................................ 8|
|2.3.|State social insurance system design ............................................................................................................... 9|
|3.<br>Metho|dology of the analysis ................................................................................................................................................. 10|
|3.1.|Data available and CEQ approach to income concepts construction ................................................... 10|
|3.2.|Direct taxes ...................................................................................................................................................... 12|
||Personal income tax and taxes on entrepreneurial income ...................................................................... 12|
||Social Protection Fund contributions.......................................................................................................... 13|
|3.3.|Indirect taxes ................................................................................................................................................... 14|
||VAT .................................................................................................................................................................. 14|
||Excises .............................................................................................................................................................. 16|
||Import duties ................................................................................................................................................... 17|
|3.4.|Direct transfers ................................................................................................................................................ 19|
|3.5.|Indirect Subsidies ............................................................................................................................................ 20|
|3.6.|In-kind transfers (health care and education) ............................................................................................. 22|
|4.<br>Results|and Discussion .......................................................................................................................................................... 23|
|4.1.|Main results ...................................................................................................................................................... 23|
|4.2.|Distributional impact and marginal contributions of fiscal interventions ............................................. 29|
|4.3.|Efficiency ......................................................................................................................................................... 31|
|4.4.|Targeting and vulnerable groups .................................................................................................................. 33|
|4.5.|Cross-country differences.............................................................................................................................. 34|
|5.<br>Conclu|sions .............................................................................................................................................................................. 34|
|References ..|........................................................................................................................................................................................ 35|
|Appendix ....|........................................................................................................................................................................................ 37|
|A.|Estimation of personal income tax .............................................................................................................. 37|
|B.|Concentration curves ..................................................................................................................................... 38|
|C.|Distribution of gains and losses at the level of final income ................................................................... 41|

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