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Ms. Era Dabla-Norris, Mr. James Daniel, Mr. Masahiro Nozaki, Cristian Alonso, Vybhavi Balasundharam, Mr. Matthieu Bellon, Chuling Chen, David Corvino, and Mr. Joey Kilpatrick
Climate change is one of the greatest challenges facing policymakers worldwide, and the stakes are particularly high for Asia and the Pacific. This paper analyzes how fiscal policy can address challenges from climate change in Asia and the Pacific. It aims to answer how policymakers can best promote mitigation, adaptation, and the transition to a low-carbon economy, emphasizing the economic and social implications of reforms, potential policy trade-offs, and country circumstances. The recommendations are grounded in quantitative analysis using country-specific estimates, and granular household, industry, and firm-level data.
Mr. John J Matovu, Duanjie Chen, and Ritva Reinikka-Soininen

Front Matter Page IMF Institute Authorized for distribution by Eric V. Clifton Content I. Introduction II. Method and Data for Tax Incidence Analysis A. Household Incidence Analysis B. Firm Incidence Analysis III. Results A. Tax Incidence on Households B. Marginal Effective Tax Rate for Domestic Firms C. Cross Border Comparison for Foreign Firms D. Compliance and Tax Administration: Impact on the METR IV. Conclusion Tables 1. Central Government Revenues 2. Marginal Effective Tax Rate on Capital for Ugandan Firms 3

Mr. John J Matovu, Duanjie Chen, and Ritva Reinikka-Soininen
This paper examines tax policy and tax reforms in Uganda. Using household survey evidence, the paper identifies which taxes are progressive and investigates whether tax reforms have made the poor better or worse off. Household survey analysis reveals that some of the tax reforms implemented in the 1990s were generally pro-poor. The paper also examines business taxation and the actual tax burden on firms’ capital investment. The analysis demonstrates that, even when the country’s level of public revenue is low at the macroeconomic level, rapidly increasing taxation may pose a constraint to private investment at the microeconomic level.
Mr. John J Matovu, Duanjie Chen, and Ritva Reinikka-Soininen

and external trade. Although it would be possible to identify the different tax rates on different commodities depending on where they are imported from, it would be difficult to identify the source of the commodity consumed by a particular household. Therefore, no attempt is made to calculate import duties based on the countries where they were imported from. B. Firm Incidence Analysis For the tax incidence on firms, the marginal effective tax rate (METR) on investment and production costs is chosen as the quantitative indicator. The key assumption

Ms. Era Dabla-Norris, Mr. James Daniel, Mr. Masahiro Nozaki, Cristian Alonso, Vybhavi Balasundharam, Mr. Matthieu Bellon, Chuling Chen, David Corvino, and Mr. Joey Kilpatrick

investigate how vulnerability to carbon taxation varies by firm characteristics after controlling for country and industry characteristics. 19 Incorporating such a firm incidence analysis when formulating a carbon tax regime would help design appropriate compensatory policies to transition to a green economy ( Bumpus 2015 ). Results are shown in Table 5 . Table 5. Differences in Energy Dependence of Firms by Specific Firm Characteristics Firm Performance Firm Characteristics Profitability Labor Productivity Size Age Low High