The Ibero-American Foundation for Administration and Public Policies (FIIAPP), through the EUROsociAL programme, financed by the European Commission, is collaborating with Uruguayan public institutions in analyzing the distributional effects and progressiveness of the country's income tax.
Uruguay has opted for a new activity in the EUROsociAL II programme. This is a technical advising activity within the “Improving the link between Planning-Budgeting and the integration of assessment in the budget cycle” action, in which the Institute of Tax Studies (IEF)is an operative partner. On this occasion, the action is being led by Jorge Onrubia, Professor of Applied Economics at the Complutense University of Madrid.
The consultancy specifically addresses improvement in the estimation of the income distribution of households, with special attention to high incomes. It went further in incorporating an income tax simulation module for Capital Income. Thus, the goal was to provide technical assistance to civil servants of the Office of Planning and Budgeting (OPP)to enable them to improve their tax simulator with the ultimate aim of mapping out a path for adjusting high incomes in the income distribution.
As detailed by Professor Onrubia, the next step would be to develop a methodology for developing and implementing micro-simulation models for public policies in order to identify the questions, limitations and development possibilities of these types of models based on the experiences examined.