The Impact of Fiscal Policy on Income Distribution in Tanzania: A Computable General Equilibrium Analysis

Makaeva, Asiya; Mmasa, Joel; Lema, Nicodemas; Msafiri, Mgeni

doi:10.2139/ssrn.3405460

Cited by 6 publications

(7 citation statements)

References 19 publications

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“…Although there is decreasing inequality in all areas in Tanzania, in urban areas the Gini index is higher (0.37) than in rural areas (0.29). This is the result of the income gap between the high-income groups engaged in the private sector and the low-income groups who migrated from the rural areas to seek employment opportunities (Maskaeva et al 2018). The last reason for Tanzania's widening income gap is the unfair distribution of income.…”

Section: Income Distributionmentioning

confidence: 99%

Application of digital technology in enhancing tax revenue collection: the case of micro businesses in Tanzania

Oreku

2021

JTR

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In spite of the importance of Micro Businesses (MBs) in forming a wide tax base, there isn’t a clear practical approach to tax administration of MBs in many developing countries. Specifically, there is limited information on how digital technology can address tax administration challenges for MBs. This paper explores the potentials of digital technology to enhance tax revenue collection and its administration to Micro Businesses in the Tanzanian context. The data on tax administration, challenges impeding tax administration to MBs, and the potential of digital technology used in tax administration were collected by questionnaire and interview. Interviews were conducted with 24 informants from Tanzania Revenue Authority, and 137 Micro Business candidates from various business sectors were provided with a questionnaire in Dar es Salaam, which is the head office of tax administration and the economic hub of Tanzania. Thematic approach was used to analyse the qualitative data. Descriptive statistics was used to analyse quantitative data through SPPS. The findings revealed that the current tax practices to MBs do not comply with tax theories of low administration cost, wide tax base, and simple-to-administer tax procedure. The findings revealed that the challenges like lack of record keeping, lack of knowledge on tax payment procedures, unknown tax collection channels, and multiple taxes can be tackled by establishing strong relationship mechanisms between TRA and MBs and using digital technology solutions to tackle challenges. The study suggests some digital technology solutions to address the challenges. Leading to that practical aspect of tax administration that can guide policy makers and tax administrators was introduced.

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Section: Income Distributionmentioning

confidence: 99%

Application of digital technology in enhancing tax revenue collection: the case of micro businesses in Tanzania

Oreku

2021

JTR

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Section: Income Distributionmentioning

confidence: 99%

The impact of indirect tax on income distribution and poverty in Tanzania

Maskaeva

Bochkaeva

Mmasa

et al. 2021

Ann Public Coop Econ

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This paper analyzes the impacts of indirect tax benefits 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. The results of the second reform find a positive effect on household income distribution and consumption. The findings show that, despite increasing unequal income distribution, poverty indicators fell.

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“…Although this resonates with a call from some quarters to increase tax revenues in Tanzania (e.g. World Bank 2015), the business community is calling for the rates to be reduced (see Section 1); Maskaeva et al (2019b) accordingly also explore the impact of a partial reduction of the VAT rate on capital commodities using a computable general equilibrium model. Tanzania.…”

Section: Vat In Tanzania: Reforms Performance and Issuesmentioning

confidence: 99%

Assessing the distributional impact of lowering the value-added tax rate for standard-rated items in Tanzania and options for recouping revenue losses

Kisanga¹,

Leyaro²,

Matengo³

et al. 2021

WIDER Working Paper

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This paper explores the distributional impact of lowering the value-added tax rate for standard-rated items in Tanzania Mainland. Using a static tax-benefit microsimulation model—TAZMOD—which is underpinned by data derived from the Household Budget Survey 2017/18, reductions in value-added taxes from 18 per cent to 17 per cent and 16 per cent are simulated. The revenue losses and impact on poverty are estimated. The rules for direct taxes are then modified in order to identify ways in which the revenue loss caused by the lowering of the standard rate of value-added taxes can be recouped.

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The Impact of Fiscal Policy on Income Distribution in Tanzania: A Computable General Equilibrium Analysis

Cited by 6 publications

References 19 publications

Application of digital technology in enhancing tax revenue collection: the case of micro businesses in Tanzania

Application of digital technology in enhancing tax revenue collection: the case of micro businesses in Tanzania

The impact of indirect tax on income distribution and poverty in Tanzania

Assessing the distributional impact of lowering the value-added tax rate for standard-rated items in Tanzania and options for recouping revenue losses

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