15.8% of population with market income (PDI approach) below 10 USD PPP suffer a fall in their welfare due to direct taxes. The tax system limits the size of their losses, providing deductions for low income households (see PIT tax). The tax burden, if measured by net losses from the system of direct taxes and benefits (excluding pension system) is the same for all income bins starting from 10 USD PPP per day. Hence, the system of direct taxes and transfers (excluding the pension system) plays an important role in mitigating poverty (especially extreme poverty, as net benefits from direct transfers constitute 64% of disposable income of households with market income below 5 USD PPP), but at the same time a significant part of fiscal support is targeted to relatively wealthy households.

The distribution of net benefits and losses by income bins related to the difference between consumable income and disposable income has a similar profile. It implies that indirect taxes and subsidies do not have significant redistributive effects. The influence of fiscal interventions determining the difference between market and final income is more pronounced (see Appendix C). It increases the number of net beneficiaries within the relatively low-income population and shifts the distribution of net donors towards high-income bins. This is due to accounting for in-kind transfers that make the total final income of the population significantly higher than market income. However, there are still net fiscal donors among the population with disposable incomes below 10 USD PPP. The tax burden at the level of final income is more progressive than at the level of disposable income, but the difference between high- and low-income bins is not large (especially if the bins are formed based on disposable income).

**Figure 15. Distribution of gains and losses at the level of disposable income with respect to market income by income bins set in USD PPP**

<!-- Start of picture text --> Gains and losses compared to the level of market income (PGT approach) distributed by bins,<br>a) ranked by market income b) ranked by disposable income<br>500 100 300 90<br>thsd. pers. % thsd. pers. %<br>250 75<br>400 80<br>200 60<br>300 60<br>150 45<br>200 40<br>100 30<br>100 20<br>50 15<br>0 0 0 0<br>0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70<br>recipients, thsd recipients, thsd<br>donors, thsd donors, thsd<br>average reciept, % of disposable income (right axis) average reciept, % of disposable income (right axis)<br>average donation, % of disposable income (right axis) average donation, % of disposable income (right axis)<br>c) Gains and losses compared to the level of market income by<br>PDI approach distributed by bins, ranked by market income<br><!-- End of picture text --> <!-- Start of picture text --> 500 100<br>thsd. pers. %<br>400 80<br>300 60<br>200 40<br>100 20<br>0 0<br>0 5 10 15 20 25 30 35 40 45 50 55 60 65 70<br>recipients, thsd<br>donors, thsd<br>average reciept, % of disposable income (right axis)<br>average donation, % of disposable income (right axis)<br><!-- End of picture text --> _Source_ : own estimates based on CEQ methodology.

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