Training on ETMOD – a tax-benefit microsimulation for Ethiopia

This event will provide potential users of the ETMOD model with comprehensive training. As well as providing an overview of the model, the event will include a number of case studies. Attendees will leave with an appreciation of how to navigate and interpret the ETMOD user interface; how to run ETMOD; and how to build and implement a basic policy reform.

Tax-benefit microsimulation models, which combine representative household-level data on incomes and expenditures and detailed coding of tax and benefit legislation, have proven to be an extremely useful tool for policy makers and researchers alike. The models apply user-defined tax and benefit policy rules to micro-data on individuals and households and calculate the effects of these rules on household income. The effects of different policy scenarios on poverty, inequality, and government revenues can be analysed and compared.

Ethiopia, like other developing countries, is now building up its social protection system and the financing of public spending will need to be increasingly based on domestic tax revenues. In this process, understanding the system-wide impacts of different policy choices is critically important, and tax-benefit microsimulation models are very well suited for this purpose.