concept (the concentration coefficient of a transfer exceeds the Gini coefficient for that income). Taxes are equalizing when their concentration curves are below the Lorenz curve of related income concept (the concentration coefficient of a tax is lower than the Gini coefficient). To preserve space, the concentration curves are presented in Appendix B, while concertation coefficients, as well as Kakwani index, representing differences between the Gini coefficient of income and the concentration coefficient of an intervention, are presented in Table 12.

**Table 12. Progressivity of taxes and transfers in relation to income concepts**

||**Market inco**<br>|**me(PGT)**<br>|**Market inco**<br>|**me(PDI)**<br>|**Disposable**<br>|**income**<br>|
|---|---|---|---|---|---|---|
||**concentration**<br>**coefficient**|**Kakwani**<br>**index**|**concentration**<br>**coefficient**|**Kakwani**<br>**index**|**concentration**<br>**coefficient**|**Kakwani**<br>**index**|
|All direct transfers incl contributory pensions|**-0.285**|**0.691**|**-0.265**|**0.557**|0.098|0.169|
|benefits|**-0.121**|**0.527**|**-0.304**|**0.596**|-0.091|0.358|
|privileges|**-0.194**|**0.601**|**-0.051**|**0.343**|0.065|0.202|
|pensions|**-0.350**|**0.757**|**--**|**--**|0.169|0.098|
|All direct taxes|**0.425**|**0.018**|**0.337**|**0.045**|0.292|0.024|
|Personal income tax|**0.434**|**0.027**|**0.337**|**0.045**|0.296|0.029|
|Social Contributions|**0.422**|**0.015**|**--**|**--**|0.290|0.022|
|All indirect subsidies|0.127|0.280|0.188|0.104|**0.186**|**0.081**|
|Utilities subsidy|0.059|0.348|0.133|0.159|**0.135**|**0.133**|
|Public transport subsidy|0.268|0.139|0.300|-0.008|**0.293**|**-0.026**|
|All indirect taxes|0.186|-0.221|0.220|-0.072|**0.224**|**-0.044**|
|VAT|0.225|-0.182|0.260|-0.032|**0.265**|**-0.002**|
|Tobacco excise|0.145|-0.262|0.073|-0.219|**0.058**|**-0.209**|
|Alcohol excise|0.010|-0.397|0.049|-0.244|**0.048**|**-0.219**|
|Fuel excise|0.349|-0.058|0.326|0.033|**0.327**|**0.060**|
|Import tariffs|0.186|-0.221|0.240|-0.052|**0.249**|**-0.018**|
|All gross in-kind transfers|0.006|0.401|-0.070|0.362|**-0.075**|**0.342**|
|Gross health transfers|-0.052|0.459|0.025|0.267|**0.038**|**0.230**|
|Primary and secondary health expenditure|-0.055|0.462|0.034|0.258|**0.049**|**0.219**|
|Tertiary (hospital) health expenditure|-0.050|0.456|0.019|0.273|**0.030**|**0.237**|
|Gross education transfers|0.055|0.352|-0.150|0.442|**-0.170**|**0.437**|
|Preschool and primary school education|0.018|0.389|-0.238|0.530|**-0.249**|**0.516**|
|Secondary education|-0.032|0.439|-0.248|0.540|**-0.268**|**0.535**|
|Continued secondary education|0.139|0.268|-0.035|0.327|**-0.064**|**0.332**|
|Higher(college)education|0.253|0.154|0.113|0.179|**0.089**|**0.178**|
|All taxes|0.355|-0.052|0.267|-0.025|0.272|0.004|
|All net transfers and subsidies excl|||||||
|contributory pensions|-0.143|0.550|-0.079|0.371|0.049|0.218|
|Gini|0.407||0.292||0.267||

_Note._ Concentration coefficient of a tax exceeding Gini coefficient of related income implies positive Kakwani index and progressivity of tax. Concentration coefficient of a transfer exceeding Gini coefficient of related income implies negative Kakwani index and regressivity of a transfer. Bold characters reflect income concept influenced by the intervention. _Source_ : own estimates based on CEQ methodology.

Direct taxes levied on market income are minimally equalizing. The concentration curves of both the personal income tax and the social contributions tax are slightly below the income schedules (the Kakwaini index is positive, but close to zero). It is not surprising, given the flat schedule of taxes with some exemptions for low-income individuals.

Indirect taxes, paid from disposable income, in turn, are disequalizing. This is particularly true for the alcohol and tobacco excises, which put most of the burden on poor households. However, since the purpose of these taxes is not to be equalizers, and, ideally, not even to deliver revenues to the budget, but to penalize unhealthy behaviors, we cannot judge these excises on their redistribution properties. Import tariffs and VAT taxes have virtually no redistributive effects with respect to disposable income. A higher share of consumption within lower deciles results in a higher burden of VAT and import duties for them, but lower VAT rates for food products<sup>23</sup> mitigate this effect. The fuel excise, however, is equalizing as the fuel excise applies mainly to car owners, such that the burden falls mainly on the upper deciles.

The concentration curves for direct transfers show that most of transfer interventions are equalizing and progressive when ranked by market income (see Appendix B, Figure 20). Pensions play a major role in redistribution from market to disposable income. Benefits and privileges interventions are also equalizing. The scale of their progressivity depends on the analyzed income concept. While privileges are more progressive if households are ranked by market income before the pension system intervention, benefits play a more important redistributive role when

> 23 Difference in expenditure structure of the 1st and 10th deciles is mainly related to food purchase and savings (see Shymanovich, 2013).

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