About
VNMOD – simulating tax and benefit policies for development in Viet Nam

The VNMOD model 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 input data set for the model can be requested here.

VNMOD, the tax-benefit microsimulation model for Viet Nam, 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 VNMOD, users can simulate reforms of the Vietnamese 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. VNMOD also allows users to implement hypothetical income tax and social security reforms and calculate their effects on inequality and the government budget. Existing policies or past policy reforms can be evaluated as well.

VNMOD can answer for example following questions:

• Would the value of an income tax deduction for dependents be larger in urban or rural areas? 
• What is the revenue implication from switching toward a household-based tax unit, compared to the current setting of individual-based tax unit?

Possible policy reform simulations in VNMOD include for example:

• amendment of personal income tax and contributions to social insurance by employers and/or employees
• a youth unemployment benefit
• a cash transfer to self-employed women

VNMOD has been developed in cooperation with the Central Institute for Economic Management (CIEM) and KU Leuven. The model has been developed further with support from Southern African Social Policy Research Insights (SASPRI). The latest version of VNMOD is based on the Viet Nam Household Living Standard Surveys (VHLSS) from 2016, 2018 and 2020, allowing for representative results on the national and sub-national level. Policies are simulated for the years 2013-23.

VNMOD was launched in November 2017. The first training course took place back to back with the launch event in Hanoi, Viet Nam. The second training course was organized in 2018. The training courses under the SOUTHMOD project are intended to be organized as in-person events. However, due to the COVID-19 pandemic, the 2021 VNMOD training was delivered as a hybrid event. The participants assembled at the Central Institute for Economic Management (CIEM), with trainers from the VNMOD national team present at the venue and additional trainers supporting the workshop remotely from the UK (SASPRI) and Finland (UNU-WIDER). The latest training events in July 2022 and April 2023 took place as a so-called research retreat, intended to empower participants to use the model to answer specific policy questions and to develop policy notes based on model simulations. Altogether around 110 participants have enrolled in the VNMOD training events, including government officials, researchers, and other local stakeholders.

Resources

SOUTHMOD user manual
Country report v3.4

Exercises

Exercises, v3.3, taxes
Exercises, v3.3, benefits

Policy notes

An assessment of targeted social cash transfers to support self-employed women in Vietnam