• Conditional cash transfers (CCT) are transfer payments targeting low income people

• aim to reduce poverty by making welfare programs

• only transfers the money to poor people in return for fulfilling specific behavioural conditions

• Conditions : children's school attendance & up-to-date vaccinations

• it may increase the immediate income of the poor & have a +ve impact upon the socio-economic well being

• it also alleviate poverty and improve the quality of human capital

• they permit children more access to education and health care

• lead to higher income (taking them out of poverty)

1. strategies to mobilize informal workers and enterprises into the formal sector 2. impose higher taxes on goods such as alcohol, cigarettes which are consumed more by high-income people. 3. improve the tax structure to remove loopholes and ensure that the tax exemptions are meaningful 4.lower rates of tax at high incomes to encourage people to pay. The lower rate could be offset if more people pay their share.

Measures to overcome non-compliance include :

commitments to reduce corruption so that people believe that the tax revenues will be spent appropriately

provide access to details concerning government budgets, so that governments are accountable to the public about what happens with the taxes they pay

public awareness campaigns to increase compliance by teaching people about the role of taxes and building a sense of national identity and responsibility

empower people to engage in open discussions about the uses of taxes.

the large size of the informal economy, whose economic activity is not taxed

There is heavy reliance on indirect taxes, but indirect taxes tend to generate lower revenues. Furthermore, indirect taxes are regressive, so worsen income inequality.

Extensive tax exemptions and loopholes in the tax structure, which mean that high income people may not pay their fair share.

High tax rates on high levels of income may give incentives to people to evade paying taxes.

There are high levels of non-compliance, where people avoid paying taxes. Possible reasons for this include :

corruption in government so that people do not trust the government to use revenues

a lack of transparency in government so that people are not aware of how their tax revenues are used a weak sense of national identity