IDEAS home Printed from https://ideas.repec.org/p/tul/ceqwps/36.html
   My bibliography  Save this paper

Fiscal Incidence in Tanzania

Author

Listed:
  • Stephen D. Younger

    (Department of Economics, Ithaca College.)

  • Flora Myamba

    (REPOA)

  • Kenneth Mdadila

    (Department of Economics, University of Dar es Salaam)

Abstract

We use methods developed by the Commitment to Equity and data from the 2011/12 Household Budget Survey to assess the effects of government taxation, social spending, and indirect subsidies on poverty and inequality in Tanzania. We also simulate several policy reforms to assess their distributional consequences. We find that Tanzania redistributes more than expected given its relatively low income and inequality, largely because both direct and indirect taxes are more excellent targeting mechanism. If the program were expanded to a size that is typical for lower-middle income countries, it could reduce poverty significantly. On the other hand, electricity subsidies are regressive despite attempts to make them more pro-poor with a lifeline tariff.

Suggested Citation

  • Stephen D. Younger & Flora Myamba & Kenneth Mdadila, 2016. "Fiscal Incidence in Tanzania," Commitment to Equity (CEQ) Working Paper Series 36, Tulane University, Department of Economics.
    • Handle: RePEc:tul:ceqwps:36
    as

    Download full text from publisher

    File URL: http://repec.tulane.edu/RePEc/ceq/ceq36.pdf
    File Function: First version, 2016
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. David K. Evans & Stephanie Hausladen & Katrina Kosec & Natasha Reese, 2014. "Community-Based Conditional Cash Transfers in Tanzania : Results from a Randomized Trial," World Bank Publications - Books, The World Bank Group, number 17220.
    2. Mr. David E. Sahn & Mr. Stephen D. Younger, 1999. "Dominance Testing of Social Sector Expenditures and Taxes in Africa," IMF Working Papers 1999/172, International Monetary Fund.
    3. Stephen D. Younger & Eric Osei-Assibey & Felix Oppong, 2015. "Fiscal Incidence in Ghana," Commitment to Equity (CEQ) Working Paper Series 35, Tulane University, Department of Economics.
    4. Karla Breceda & Jamele Rigolini & Jaime Saavedra, 2009. "Latin America and the Social Contract: Patterns of Social Spending and Taxation," Population and Development Review, The Population Council, Inc., vol. 35(4), pages 721-748, December.
    5. Stephen D. Younger & Eric Osei-Assibey & Felix Oppong, 2015. "Fiscal Incidence in Ghana," Commitment to Equity (CEQ) Working Paper Series 1335, Tulane University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:bla:afrdev:v:29:y:2017:i:s1:p:1-14 is not listed on IDEAS
    2. Jon Jellema & Nora Lustig & Astrid Haas & Sebastian Wolf, 2016. "The Impact of Taxes, Transfers, and Subsidies on Inequality and Poverty in Uganda," Commitment to Equity (CEQ) Working Paper Series 53, Tulane University, Department of Economics.
    3. Jose Cuesta & Jon Jellema & Lucia Ferrone, 2021. "Fiscal Policy, Multidimensional Poverty, and Equity in Uganda: A Child-Lens Analysis," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(3), pages 427-458, June.
    4. Nora Lustig, 2017. "Fiscal Policy, Income Redistribution and Poverty Reduction in Low and Middle Income Countries," Commitment to Equity (CEQ) Working Paper Series 54, Tulane University, Department of Economics.
    5. Stephen Younger, 2016. "The Impact of Reforming Energy Subsidies, Cash Transfers, and Taxes on Inequality and Poverty in Ghana and Tanzania," Commitment to Equity (CEQ) Working Paper Series 1355, Tulane University, Department of Economics.
    6. Nora Lustig, 2016. "Fiscal Policy, Inequality and the Poor in the Developing World," Working Papers 1612, Tulane University, Department of Economics, revised Aug 2017.
    7. Haydeeliz Carrasco & Hamidou Jawara & Moritz Meyer, 2022. "The Effects Of Fiscal Policy On Inequality And Poverty In The Gambia," Commitment to Equity (CEQ) Working Paper Series 117, Tulane University, Department of Economics.
    8. Nora Lustig, 2016. "Commitment to Equity Handbook. A Guide to Estimating the Impact of Fiscal Policy on Inequality and Poverty," Commitment to Equity (CEQ) Working Paper Series 01, Tulane University, Department of Economics.
    9. Stephen Younger, 2016. "The Impact of Reforming Energy Subsidies, Cash Transfers, and Taxes on Inequality and Poverty in Ghana and Tanzania," Commitment to Equity (CEQ) Working Paper Series 55, Tulane University, Department of Economics.
    10. Steve Muchiri & Sun‐Ki Choi, 2021. "Evaluating the significance of cash transfers on household consumption," African Development Review, African Development Bank, vol. 33(4), pages 662-673, December.
    11. Jose Cuesta & Jon Jellema & Lucia Ferrone, 0. "Fiscal Policy, Multidimensional Poverty, and Equity in Uganda: A Child-Lens Analysis," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 0, pages 1-32.
    12. Nora Lustig, 2016. "Fiscal policy, inequality, and the poor in the developing world," WIDER Working Paper Series 164b (Revised version May, World Institute for Development Economic Research (UNU-WIDER).
    13. Dale, Elina & Evans, David B. & Gopinathan, Unni & Kurowski, Christoph & Norheim, Ole F. & Ottersen, Trygve & Voorhoeve, Alex, 2023. "Open and inclusive: fair processes for financing universal health coverage," LSE Research Online Documents on Economics 119795, London School of Economics and Political Science, LSE Library.
    14. Languille, Sonia, 2019. "The politics of the education budget: Financing mass secondary education in Tanzania (2004–2012)," International Journal of Educational Development, Elsevier, vol. 66(C), pages 96-104.
    15. Nora Lustig, 2017. "Fiscal Policy, Income Redistribution and Poverty Reduction in Low and Middle Income Countries," Commitment to Equity (CEQ) Working Paper Series 1354, Tulane University, Department of Economics.
    16. Vanesa Jorda & Jose M. Alonso, 2020. "What works to mitigate and reduce relative (and absolute) inequality?: A systematic review," WIDER Working Paper Series wp-2020-152, World Institute for Development Economic Research (UNU-WIDER).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stephen Younger, 2016. "The Impact of Reforming Energy Subsidies, Cash Transfers, and Taxes on Inequality and Poverty in Ghana and Tanzania," Commitment to Equity (CEQ) Working Paper Series 1355, Tulane University, Department of Economics.
    2. Higgins, Sean & Lustig, Nora, 2016. "Can a poverty-reducing and progressive tax and transfer system hurt the poor?," Journal of Development Economics, Elsevier, vol. 122(C), pages 63-75.
    3. Nora Lustig, 2016. "Fiscal Policy, Inequality and the Poor in the Developing World," Working Papers 1612, Tulane University, Department of Economics, revised Aug 2017.
    4. Younger, Stephen D., 2016. "Ghana’s macroeconomic crisis: Causes, consequences, and policy responses:," IFPRI discussion papers 1497, International Food Policy Research Institute (IFPRI).
    5. Stephen Younger, 2016. "The Impact of Reforming Energy Subsidies, Cash Transfers, and Taxes on Inequality and Poverty in Ghana and Tanzania," Commitment to Equity (CEQ) Working Paper Series 55, Tulane University, Department of Economics.
    6. Nora Lustig, 2016. "The Sustainable Development Goals, Domestic Resource Mobilization and the Poor," Commitment to Equity (CEQ) Working Paper Series 61, Tulane University, Department of Economics.
    7. Nora Lustig, 2016. "Fiscal Policy, Inequality and the Poor in the Developing World," Commitment to Equity (CEQ) Working Paper Series 1323, Tulane University, Department of Economics.
    8. repec:rac:ecchap:2017-15 is not listed on IDEAS
    9. Nora Lustig, 2016. "Fiscal policy, inequality, and the poor in the developing world," WIDER Working Paper Series 164a, World Institute for Development Economic Research (UNU-WIDER).
    10. Younger, Stephen D., 2015. "Synopsis, Is there fiscal space for CAADP in Ghana?," GSSP policy notes 8, International Food Policy Research Institute (IFPRI).
    11. Namibia Statistics Agency & World Bank, 2017. "Does Fiscal Policy Benefit the Poor and Reduce Inequality in Namibia?," World Bank Publications - Reports 27538, The World Bank Group.
    12. Odusola, Ayodele & Lal, Radhika & Dhliwayo, Rogers & Sabo, Isiyaka & Neuhaus, James, 2017. "Drivers of Income Inequality in Burkina Faso, Ghana and the United Republic of Tanzania: A comparative analysis," UNDP Africa Reports 270551, United Nations Development Programme (UNDP).
    13. Nora Lustig, 2016. "The Sustainable Development Goals, Domestic Resource Mobilization and the Poor," Commitment to Equity (CEQ) Working Paper Series 1361, Tulane University, Department of Economics.
    14. Nora Lustig, 2016. "Fiscal policy, inequality, and the poor in the developing world," WIDER Working Paper Series 164b (Revised version May, World Institute for Development Economic Research (UNU-WIDER).
    15. Damiano Kulundu Manda & Reuben Mutegi & Samuel Kipruto & Moses Muriithi & Paul Samoei & Martine Oleche & Germano Mwabu & Stephen D. Younger & Anda David, 2020. "Fiscal Incidence, Inequality and Poverty in Kenya: A CEQ Assessment," Commitment to Equity (CEQ) Working Paper Series 101, Tulane University, Department of Economics.
    16. UNDP Regional Bureau for Africa & Ayodele Odusola & Radhika Lal & Rogers Dhilwayo & Isiyaka Sabo & James Neuhaus, "undated". "Drivers of Income Inequality in Burkina Faso, Ghana and the United Republic of Tanzania: A comparative analysis," UNDP Africa Policy Notes 2017-15, United Nations Development Programme, Regional Bureau for Africa.
    17. Nora Lustig, 2016. "Fiscal policy, inequality and the poor in the developing world," Working Papers 418, ECINEQ, Society for the Study of Economic Inequality.
    18. Barrientos, Armando, 2011. "On the Distributional Implications of Social Protection Reforms in Latin America," WIDER Working Paper Series 069, World Institute for Development Economic Research (UNU-WIDER).
    19. Nora Lustig & Florencia Amábile & Marisa Bucheli & George Gray Molina & Sean Higgins & Miguel Jaramillo & Wilson Jiménez Pozo & Veronica Paz Arauco & Claudiney Pereira & Carola Pessino & Máximo Rossi , 2014. "El impacto del sistema tributario y del gasto social sobre la desigualdad y la pobreza en Argentina, Bolivia, Brasil, México, Perú y Uruguay: Un panorama general," Commitment to Equity (CEQ) Working Paper Series 1313S, Tulane University, Department of Economics.
    20. Nora Lustig, 2011. "Fiscal policy and income redistribution in Latin America: Challenging the conventional wisdom," Working Papers 227, ECINEQ, Society for the Study of Economic Inequality.
    21. Bénédicte de la Brière & Deon Filmer & Dena Ringold & Dominic Rohner & Karelle Samuda & Anastasiya Denisova, 2017. "From Mines and Wells to Well-Built Minds," World Bank Publications - Books, The World Bank Group, number 26490.

    More about this item

    Keywords

    fiscal incidence; poverty; inequality; fiscal policy; Tanzania;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tul:ceqwps:36. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nora Lustig (email available below). General contact details of provider: https://edirc.repec.org/data/detulus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.