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Microsimulation analysis of the impact of indirect tax benefits on income distribution and poverty alleviation in Tanzania: An application of TAZMOD

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  • Asiya Maskaeva
  • Zanda Bochkaeva
  • Joel Mmasa
  • Mgeni Msafiri
  • Eric Iramba

Abstract

This paper analyses the impacts of indirect tax policy reforms on income distribution and poverty in Tanzania by applying a standard static microsimulation model TAZMOD v1.8. The simulations model two indirect tax reforms involving changes to the excise duty and value-added tax rates on alcoholic beverages and tobacco products, and changes to employers' and employees' contributions to the National Health Insurance Fund. The results of the first reform find a positive effect on government tax revenue and a neutral effect on income distribution and poverty.

Suggested Citation

  • Asiya Maskaeva & Zanda Bochkaeva & Joel Mmasa & Mgeni Msafiri & Eric Iramba, 2019. "Microsimulation analysis of the impact of indirect tax benefits on income distribution and poverty alleviation in Tanzania: An application of TAZMOD," WIDER Working Paper Series wp-2019-16, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2019-16
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    References listed on IDEAS

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    1. Dominic Haazen, 2012. "Making Health Financing Work for Poor People in Tanzania," World Bank Publications - Books, The World Bank Group, number 2240.
    2. Kidane, Asmerom & Hepelwa, Aloyce & Mdadila, Kenneth & Ngeh, Ernest & Hu, Teh Wei, 2017. "The demand for cigarette in Tanzania: A temporal approach," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 45, pages 136-143.
    3. Bird,Richard M., 2015. "Tobacco and alcohol excise taxes for improving public health and revenue outcomes : marrying sin and virtue ?," Policy Research Working Paper Series 7500, The World Bank.
    4. Pia Rattenhuber & Maria Jouste, 2018. "A role for universal pension? Simulating universal pensions in Ecuador, Ghana, Tanzania, and South Africa," WIDER Working Paper Series 023, World Institute for Development Economic Research (UNU-WIDER).
    5. Pia Rattenhuber & Maria Jouste, 2018. "A role for universal pension? : Simulating universal pensions in Ecuador, Ghana, Tanzania, and South Africa," WIDER Working Paper Series wp-2018-23, World Institute for Development Economic Research (UNU-WIDER).
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    Cited by:

    1. Elineema Kisanga & Vincent Leyaro & Wahabi Matengo & Michael Noble & Helen Barnes & Gemma Wright, 2021. "Assessing the distributional impact of lowering the value-added tax rate for standard-rated items in Tanzania and options for recouping revenue losses," WIDER Working Paper Series wp-2021-38, World Institute for Development Economic Research (UNU-WIDER).
    2. George S. Oreku, 2021. "Application of digital technology in enhancing tax revenue collection: the case of micro businesses in Tanzania," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 7(2), pages 173-192.
    3. Susan Namirembe Kavuma & Christine Byaruhanga & Nicholas Musoke & Patrick Loke & Michael Noble & Gemma Wright, 2020. "An analysis of the distributional impact of excise duty in Uganda using a tax-benefit microsimulation model," WIDER Working Paper Series wp-2020-70, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    Income distribution; SOUTHMOD; Tax-benefit microsimulation; Tax policy reform; Microsimulation; TAZMOD;
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