Reshuffling of the population by income ranking caused by the fiscal intervention leads to impoverishments for some households. According to the disposable income concept, 1.9% of population became poor or fall into deeper poverty due to the system of direct taxes and transfers (irrespective of the approach to pension system modelling, see Table 10). It means that more than half of the poverty (56.3%) is caused by fiscal redistribution. At the level of consumable income, the scale of fiscal impoverishment is even higher: 3.3% of population turned poor due to direct and indirect taxes and subsidies, including the pension system, which constituted 67% of the total poverty headcount (if fiscal interventions do not include the pension system, the scale of impoverishment is even larger).

Nevertheless, fiscal gains to the poor are much higher than fiscal impoverishment. Around 20% of the population, poor at the level of market income by the PGT approach (i.e. 97.3% of pre-fiscal poverty headcount) enjoy an increase in their welfare after receiving direct transfers and pensions, and paying direct taxes. Broader concepts of fiscal interventions create benefits for similar shares of pre-fiscal poor population. The scale of these benefits is around 60% of the national absolute poverty line, which is also higher than the impoverishment effect. If the pension system is not treated as a fiscal intervention, the scale of poverty reduction generated by direct transfers, as well as indirect subsidies, is much lower (around 4% of population). Nevertheless, around three-quarters of prefisc poor population benefits from fiscal interventions, and the size of the net benefit is around 25% of the poverty line.

The fact that fiscal gains to the poor surpass fiscal impoverishment in absolute terms is also illustrated by poverty gap dynamics, which is actually the difference between fiscal gains to the poor per capita and fiscal impoverishment per capita. Estimates show, that the poverty gap reduces from 12.1% at the level of market income by PGT approach to less than 1% at the level of disposable and consumable income. If the pension system is excluded from the analysis, the scale of the poverty gap reduction is much lower, as initially depth of poverty is rather low.

**Table 10. Fiscal gains to the poor and fiscal impoverishment in relation to market income**

||Pen<br>|sions asgove<br>|rnment trans<br>|fer<br>|Pe<br>|nsions as de<br>|ferred incom<br>|e<br>|
|---|---|---|---|---|---|---|---|---|
||National<br>povert|extreme<br>yline|National<br>povert|moderate<br>yline|National<br>povert|extreme<br>yline|National<br>pover|moderate<br>tyline|
||Disposable<br>Income<br>|Consumable<br>Income|Disposable<br>Income<br>|Consumable<br>Income|Disposable<br>Income<br>|Consumable<br>Income|<br>Disposable<br>Income|<br>Consumable<br>Income|
|||Fisca|l impoverish|ment|||||
|headcount, % of population|1.89|3.25|10.52|15.39|1.89|3.56|11.00|16.96|
|headcount, % of post-fiscal poor|56.30|62.96|53.03|62.01|56.12|68.98|55.47|68.33|
|fiscal impoverishment per capita, %|||||||||
|of market income|0.24|0.45|1.46|2.32|0.12|0.36|0.63|1.64|
|fiscal impoverishment per capita<br>among fiscally impoverished, % of<br>povertyline|12.49|13.73|13.85|15.06|6.59|10.00|5.76|9.66|
|||Fisca<br>|l gains to the<br>|poor<br>|||||
|headcount, % of population|19.67|19.29|28.38|26.89|4.44|4.13|12.22|10.86|
|headcount, % of pre-fiscal poor|97.30|95.42|86.88|82.30|75.26|70.04|56.60|50.33|
|fiscal gains to the poor per capita, %|||||||||
|of market income|11.77|11.65|14.51|13.92|1.14|1.04|2.14|1.69|
|fiscal gains to the poor per capita<br>among fiscal gainers, % of poverty<br>line|59.87|60.39|51.14|51.77|25.71|25.07|17.49|15.53|
|Poverty gap reduction, pp (fiscal<br>gains minus fiscal impoverishment<br>per capita)|11.54|11.20|13.06|11.60|1.02|0.68|1.50|0.05|

_Note_ . Fiscal impoverishment is a considered a situation when i) somebody who is non-poor according to the pre-fiscal income (market income) appears to be poor according to the post-fiscal income (disposable or consumable), ii) somebody poor according to the pre-fiscal income suffers further income reduction due to fiscal interventions. Fiscal gains to the poor take place when somebody poor according to the pre-fiscal income enjoys income increase due to fiscal interventions. _Source_ : own estimates based on CEQ methodology and Higgins, Lustig (2016).

According to the socioeconomic status, the pension age population enjoys most of the gains from fiscal interventions if the pension system is treated as a fiscal intervention, while the employed population of working age bear most of the costs (see Figure 16). If the pension system is excluded from the analysis, beneficiaries of the system of direct taxes and transfers are children, the non-employed population of working and above working age, while the employed population (both working and above working age) are net payers within the system. Indirect taxes and subsidies contribute to further increases of welfare of the unemployed population of working age and of 28