MOZMOD – simulating tax and benefit policies for development in Mozambique
MOZMOD model is freely accessible for non-commercial research use. You may request access to the model here.
MOZMOD, the tax-benefit microsimulation model for Mozambique, is a highly versatile yet easy to use tool for policymakers and researchers alike. It allows the user to analyse and compare the effects of different benefit policy scenarios on poverty, inequality, and government revenues. The model applies user-defined tax and benefit policy rules to micro-data on individuals and households and calculates the effects of these rules on household income.
With MOZMOD, users can simulate hypothetical reforms of the tax-and-benefit system. They can estimate, for example, the number of beneficiaries and analyse the characteristics of the prospective recipients of a hypothetical benefit. MOZMOD also allows users to implement hypothetical income tax and social security reforms and calculate their effects on the government budget.
MOZMOD can answer for example following questions:
- Do the prospective recipients work in the formal sector or not?
- What is the expected impact on poverty reduction?
- How much would such a policy cost?
- How could tax rates be increased to offset the additional expenditures on social protection?
- Which type of tax reform benefits the vulnerable population more in terms of poverty and inequality reduction?
Possible policy reform simulations in MOZMOD include for example:
- a universal child benefit,
- a universal pension payment to the elderly or
- a youth unemployment benefit
MOZMOD has been developed in cooperation with the Ministry of Economy and Finance of Mozambique and Southern African Social Policy Research Insights (SASPRI). The latest available version of MOZMOD is based on the Household Budget Survey (Inquérito ao Orçamento Familiar, IOF) 2008-09 and 2014-2015, allowing for representative results at the national level. Policies are simulated for 2015-2019 (based on updated household level data from 2008-2009 and 2014-2015). Given its expertise and long-term support to the Government of Mozambique since 2006 in establishing a Social Protection Floor at the national level, International Labour Organization (ILO) has collaborated with the MOZMOD initiative and supported the training courses during 2017-2019.
The first training course on MOZMOD was organized in collaboration with ILO and took place in Maputo at the end of June 2017. After that two more training courses have been organized for altogether over 50 participants from different government departments to explore how they could use MOZMOD in their daily work. As a result the MOZMOD team has used the model to simulate the impact of a universal child grant on poverty reduction, and implications for the government’s budget. Such simulations have contributed to the debate in the Ministry of Gender, Child and Social Action on the upcoming pilot of a child grant in Mozambique. MOZMOD was officially launched for use in 2019.
Exercises | Exercícios
This training course explains how to set up and use the tax-benefit microsimulation model for Mozambique, MOZMOD. It aims at giving the users of SOUTHMOD models an introduction to microsimulation in general and the MOZMOD model v1.0 in particular.
MOZMOD 1 | a short introduction
In this video, we describe the MOZMOD model and introduce the SOUTHMOD research project. This is the first video in a series of five videos that together form a training course on how to set up and use the tax-benefit microsimulation model for Mozambique, MOZMOD.
We start by briefly explaining what microsimulation is and what it can be used for. The session also explains the data and policies that are included in the current version of the MOZMOD model v1.0, for what purpose the model can be used, and how it works. Finally, we will look at the key parts of the MOZMOD user interface and give an overview of what is covered in the rest of the training course.
MOZMOD 2 | getting started
In this video, we explore MOZMOD in more detail and depth. This is the second video in a series of five videos that together form a training course on how to set up and use the tax-benefit microsimulation model for Mozambique, MOZMOD.
We introduce the policies included in the model, especially the definitional policies and tax policies, and show how to navigate the interface to find more information about the functions and parameters of the policies. We define the spine and explain why the order in which the policies are listed in the model is important. We also introduce constants, income lists, and tax units and policies. We briefly touch upon benefit policies as well, although these will be covered more thoroughly in the third video of the training course.
MOZMOD 3 | tax and benefit policies
In this video, we will look at how tax-benefit policies are constructed. This is the third video in a series of five videos that together form a training course on how to set up and use the tax-benefit microsimulation model for Mozambique, MOZMOD.
We define systems, policies, functions, and parameters and explain how they relate to each other. The policy functions Elig, ArithOP, and BenCalc are covered in detail. At the end of the video we give step-by-step instructions on how to run the model and access the output.
MOZMOD 4 | policy changes
In this video, we will build on what was covered in the previous video. This is the fourth video in a series of five videos that together form a training course on how to set up and use the tax-benefit microsimulation model for Mozambique, MOZMOD.
We will explain how to add a new system to MOZMOD, how to change an existing policy in the model, and how to add a new policy to MOZMOD. We will also show how to do all of these in the MOZMOD interface.
MOZMOD 5 | walking through the model
In this video, we will walk you through the whole MOZMOD model. This is the last video in a series of five videos that together form a training course on how to set up and use the tax-benefit microsimulation model for Mozambique, MOZMOD.
The video starts with reviewing the user interface, focusing on the tabs: the country and administration tools, and the applications. We will then move on to go through the definitional policies and tax policies, focusing on income tax and simplified (turnover) tax. At the end of the video we will look at social benefits: the direct social support programme and the basic social support programme.