Economics of tariffs and taxes

1
Economics of tariffs and taxes

• The removal of trade barriers have associated
  costs
• Ø Reduced protection and the probable worsening
  of the financial position for the relevant
  industry.
• Ø Loss of employment and income and the negative
  effect on the standard of living of the affected
  workers.
• Ø Reduced government revenue, depending on
  governments level of dependence on trade
  revenue.

2
Losses due to the removal of T T would be
offset by

•  
• Increased economic efficiency
• Increased consumer welfare
• Freer trade. 

3
Tax relief helps achieve public health objectives
by

•  
• Reducing recurrent budgetary needs, particularly
  where a country ministry of health provides
  commodities free of charge or at subsidized
  prices.
• Reducing consumer prices, making commodities more
  financially accessible.
• Increasing the supply of products by enabling
  private providers to purchase them at lower
  prices.

4
What type of information is needed?

• 1. Tax relief (which takes the form of
  exemptions, waivers, reduction or some
  combination of the these). For example in 1993
  Tanzania gave tax exemptions on sales tax for
  mosquito nests and this resulted in more nets
  being manufactured and a firm investing in a lot
  of equipment to produce nets.
• 2.  Transaction imported or purchased locally.
• 3.  Buyer (public, private for profit and private
  non-profit).
•   

5
Type of Information needed

• 4. Development of programs to strengthen the
  competitiveness of small and medium sized
  enterprises.
• 5. Grants to create and upgrade supply capacity
• 6. Direct subsidies to support the performance of
  commercial enterprises in health.
• 7. An analysis of the non-tariff barriers such as
  the import quotas, exchange control, customs
  delays, government purchasing policies, customs
  calculation and valuation procedures, boycotts,
  technical barriers and the issue of bribes and
  voluntary restraint.

6
Status of tariffs and taxes in Southern Africa
7
Cross Cutting Issues
8
ITN Distribution Chain