Tax-benefit microsimulation modelling in Tanzania: A feasibility study

Leyaro, Vincent; Kisanga, Elineema; Wright, Gemma; Barnes, Helen; Mpike, Michael

doi:10.35188/unu-wider/2015/034-8

Cited by 7 publications

(13 citation statements)

References 3 publications

(3 reference statements)

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“…The analysis in this paper was undertaken using the Tanzanian tax-benefit microsimulation model TAZMOD, which was developed recently by the authors and colleagues (Leyaro et al, 2017) as part of the SOUTHMOD programme (United Nations University World Institute for Development Economics Research [UNU-WIDER], 2018). The process of building a tax-benefit microsimulation model involves the translation of social security and taxation policies into a formal set of rules that can be applied to individuals and households in a nationally representative survey.…”

Section: Methodsmentioning

confidence: 99%

“…TAZMOD is a static tax-benefit microsimulation model for mainland Tanzania. The model is underpinned by the Household Budget Survey (HBS) 2011/12, which was conducted by the (Leyaro et al, 2017).…”

Section: Methodsmentioning

confidence: 99%

“…The number of individuals found to be eligible for the PSSN cash benefits using TAZMOD amount to 120 per cent of TASAF's reported numbers of beneficiaries for the 2014/15 period (Leyaro et al, 2017). Thus, if the area-selection and community-targeting elements of the programme are set aside, it can be estimated that in 2015 the cash benefits had a take-up rate of 80 per cent.…”

Section: Author's Surname One Surname Two Policy Transparency In Thementioning

confidence: 99%

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Policy Transparency in the Public Sector: The Case of Social Benefits in Tanzania

Wright¹,

Leyaro²,

Kisanga³

et al. 2018

IJM

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In this paper we explore the eligibility criteria for the social benefits that form part of the Productive Social Safety Net programme in Tanzania-the Basic Cash Transfer and Variable Cash Transfer. An account is given of how simplified variants of these criteria were applied within TAZMOD, a static tax-benefit microsimulation model for Tanzania, in order to estimate take-up rates for these benefits. Confronted by the opaque and discretionary elements of the current benefits, we then simulate several categorical benefit alternatives which overcome many of the challenges of the current design, including a revenue neutral option that is more effective at reducing poverty and inequality. It is argued that by shifting to categorical benefits and removing AUTHOR'S SURNAME ONE, SURNAME TWO Policy Transparency in the Public Sector: The Case of Social Benefits in Tanzania the community targeting, proxy means-test, and conditionality elements, transparency would be enhanced. This would not only enable more accurate monitoring of access to and take-up of the benefits but would also enable citizens to determine their eligibility which is currently not possible.

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Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Section: Author's Surname One Surname Two Policy Transparency In Thementioning

confidence: 99%

See 1 more Smart Citation

Policy Transparency in the Public Sector: The Case of Social Benefits in Tanzania

Wright¹,

Leyaro²,

Kisanga³

et al. 2018

IJM

Self Cite

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“…Tax unit is the individual Paid by employed and self-employed (with turnover > TZS20million Definition of taxable income is labour income dependent on many different individual circumstances, see Leyaro et al (2015) Tax schedule is formed of five tax bands and rates between 0% and 35% Presumptive tax (self-employment turnover < TZS20 million p.a) -individual level (0-5.25%) Capital gains tax -(interest on land/buildings) 10% for residents). 20% for non-residents Tax unit is the individual (but for allowances an extended family is defined Taxable income is labour income Tax schedule is formed of five bands, rates are between 0% and 25% Presumptive tax: turnover from non-farm income GHc10 000 -120 000, at a flat tax rate 3%.…”

Section: Personal Income Taxmentioning

confidence: 99%

“…Capital income tax -(investment income/capital gains) -15% in 2016-2017). In 2016, 8% tax introduced on rental Value added Tax and Excise duties VAT (18%) + zero rated goods Excise duty (alcohol, tobacco, vehicles, fuelrates range from 5-50% -see Leyaro et al (2015) for specific rates VAT (13% in 2013; 13% in 2014 onwards but an additional 2.5% on goods subject to an excise tax (NHIL)) + zero rated goods Excise duty (alcohol, petroleum, soft drinks bottled water and tobacco -tax rates range from 2.5 -171%, see Adu-Ababio, 2017 for specific rates)…”

Section: Personal Income Taxmentioning

confidence: 99%

Learning from the ʻbestʼ: The impact of tax-benefit systems in Africa

Bargain¹,

Jara²,

Kwenda-Magejo³

et al. 2019

WIDER Working Paper

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte.Abstract: Redistributive systems in Africa are still in their infancy but are constantly expanding in order to finance increasing public spending. This paper aims at characterizing the redistributive potential of six African countries: Ghana, Zambia, Mozambique, Tanzania, Ethiopia, and South Africa. These countries show contrasted situations in terms of income distribution. We assess the role of tax-benefit systems to explain these differences. Using newly developed tax-benefit microsimulations for all six countries, we produce counterfactual simulations whereby the system of the most (least) redistributive country is applied to the population of all other countries. In this way, we can decompose the total country difference in income distribution between the contribution of tax-benefit policies versus the contribution of other factors (market income distributions, demographics, etc.). This analysis contributes to the recent literature on the redistributive role of socio-fiscal policies in developing countries and highlights the role of microsimulation techniques to characterize how different African countries can learn from each other to improve social protection and reduce inequality. The results presented here are based on newly developed microsimulation models developed, maintained and managed by UNU-WIDER in collaboration with the EUROMOD team at ISER (University of Essex), SASPRI (Southern African Social Policy Research Institute) and local partners in selected developing countries (Ethiopia, Ghana, Mozambique, Tanzania, Zambia). We are indebted to the many people who have contributed to the development of SOUTHMOD and the different microsimulation models. We are grateful to Katrin Gasior, Chrysa Leventi, Michael Noble, Gemma Wright and Helen Barnes for sharing their harmonized version of SOUTHMOD models. We also thank Pia Rattenhuber and participants of the SOUTHMOD workshop in Helsinki for useful comments on previous versions of the paper. The results and their interpretation presented in this publication are solely the authors' responsibility.

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Income Distribution and the Potential of Redistributive Systems in Africa: A Decomposition Approach

Bargain

Jara

Kwenda

et al. 2021

Journal of African Economies

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Redistributive systems in Africa are still in their infancy but are expanding in order to finance increasing public spending. This paper aims at characterising the redistributive potential of six African countries: Ghana, Zambia, Mozambique, Tanzania, Ethiopia and South Africa. These countries show contrasted situations in terms of income distribution. We assess the role of tax-benefit systems to explain these differences. Using newly developed tax-benefit microsimulations for all six countries, we produce counterfactual simulations whereby the system of the most (least) redistributive country is applied to the population of all other countries. In this way, we can decompose country differences in income distribution into the contribution of tax-benefit policies and the contribution of other factors (market income distribution, demographic structure, etc.). This analysis complements the recent literature on the redistributive role of socio-fiscal policies in developing countries and highlights the advantages of microsimulation and decomposition techniques to characterise how different African countries can learn from each other to improve social protection and reduce inequality.

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Tax-benefit microsimulation modelling in Tanzania: A feasibility study

Cited by 7 publications

References 3 publications

Policy Transparency in the Public Sector: The Case of Social Benefits in Tanzania

Policy Transparency in the Public Sector: The Case of Social Benefits in Tanzania

Learning from the ʻbestʼ: The impact of tax-benefit systems in Africa

Income Distribution and the Potential of Redistributive Systems in Africa: A Decomposition Approach

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