In this work project, we use micro data from the Household Budget Survey
wave of 2010 to measure the extent of progressivity of income and VAT taxes,
together with social security contributions. We use the witholding tax rates to
convert the net-at-source-income reported by the individuals in the survey into gross
income, and then, through a careful implementation of the details of the income
tax system, compute the net income. The identi cation of tax units and use of
gross income allows for improvements on previous literature. We use the Reynolds-
Smolensky and Kiefer indices to compute the progressivity of the several components
of the tax system, i.e., (i) social security contributions; (ii) income taxes, including
tax credits and deductions; (iii) witholding taxes, and, (iv) value added tax on
nal consumption goods and services. Behavioural responses to taxation are also
inspected. Income tax is found to be progressive, with withheld taxation being more
progressive than nal taxes. Tax deductions are found to be more regressive than
tax credits, and VAT is found to be regressive