TAZMOD – simulating tax and benefit policies for development in Tanzania
TAZMOD model itself is freely accessible for non-commercial research use but input data has to be manually constructed. Access to the model and the Stata do-files necessary to produce the underpinning data set that corresponds to the model can be requested here.
TAZMOD, the tax-benefit microsimulation model for Tanzania, 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 TAZMOD, 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. TAZMOD also allows users to implement hypothetical income tax and social security reforms and calculate their effects on the government budget.
TAZMOD can answer for example following questions:
- Do the prospective recipients of a new policy work in the formal sector or not?
- How much would such a policy cost?
- How could tax rates be increased to offset the additional expenditures on social protection?
Possible policy reform simulations in TAZMOD include for example:
- a universal child benefit,
- a universal pension payment to the elderly
- a youth unemployment benefit
In addition to these the model allows the simulation of multitude of other policy reforms as well.
TAZMOD has been developed in cooperation with the Department of Economics of the University of Dar es Salaam and Southern African Social Policy Research Insights (SASPRI). The latest version of TAZMOD is based on the Tanzania Household Budget Survey 2011-2012 and 2017-2018, allowing for representative results at the national level for Tanzania mainland. Policies are simulated for 2012, and 2015 through 2019 (based on updated household level data from 2011-2012 and 2017-2018).
The first training course on TAZMOD was organized in Dar es Salaam in September 2017 including participants from the Tanzanian government and researchers. Two more training events have followed this one in June 2018 and another one in March 2020. The model has raised a lot of interest among various governmental departments in Tanzania.
This training course explains how to set up and use the tax-benefit microsimulation model for Tanzania, TAZMOD. It aims at giving the users of SOUTHMOD models an introduction to microsimulation in general and the TAZMOD model v1.0 in particular.
TAZMOD 1 | a short introduction
In this video, we describe the TAZMOD 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 Tanzania, TAZMOD.
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 TAZMOD model v.1.0, for what purpose the model can be used, and how it works. Finally, we look at the key parts of the user interface and give an overview of what is covered in the rest of the training course. We also give a walkthrough of the model.
TAZMOD 2 | getting started
In this video, we explore TAZMOD 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 Tanzania, TAZMOD.
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 briefly touch upon benefit policies, although these will be covered more thoroughly in the third video of the training course. At the end of the video, we define the spine and explain why the order in which the policies are listed in the model is important.
TAZMOD 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 Tanzania, TAZMOD.
We will define systems, functions, and parameters and explain how they relate to each other. The policy functions Elig, ArithOP, BenCalc, and SchedCalc 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.
TAZMOD 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 Tanzania, TAZMOD.
We will explain how to add a new system to TAZMOD, how to change an existing policy in TAZMOD, and how to add a new policy. We will also show how to do all of these in the TAZMOD interface.
TAZMOD 5 | walking through the model
In this video, we will walk you through the whole TAZMOD 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 Tanzania, TAZMOD.
The video starts with reviewing the user interface, focusing on the tabs: the country and administration tools, and the applications. We then move on to go through the definitional policies and tax policies, focusing on direct taxes. At the end of the video we will look at the productive social safety net (PSSN) benefits.