The paper assesses the effects of taxes and benefits on income in African countries. The comparative analysis focuses on the distribution and composition of incomes, and the effect of taxes and benefits on poverty and inequality. It highlights overall distributional effects and targeting of benefits as well as differences between population groups (e.g. rural vs. urban population, different age groups, male vs. female headed households).
The analysis is based on the SOUTHMOD tax-benefit microsimulation models for Ghana, Ethiopia, Zambia, Tanzania, Mozambique, South Africa and Namibia. All models are based on EUROMOD, a platform originally developed to enable comparative research on the effects of taxes and benefits on household incomes.
The comparative analysis highlights the differences of tax and benefit systems between African countries and more importantly, their different effects on poverty and inequality. It furthermore shows the extent (or lack) of support systems available for different population groups and the role of different income components.
