PEP researchers in Tanzania hold national policy conference to highlight how VAT reductions can boost growth

March 28, 2019 | Dodoma, Tanzania

A team of local PEP researchers held a national policy conference to highlight how VAT reductions on capital commodities can boost growth in Tanzania.

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March 28, 2019 - A team of local PEP researchers held a national policy conference in Dodoma, Tanzania, to discuss their findings on how VAT reductions on capital commodities can boost growth.

Around 20 stakeholders, including policy advisors from the Ministry of Finance and Planning (MoFP), the Ministry of Agriculture, and the Tanzanian Revenue Authority (TRA), attended the event where the research team discussed their findings and recommendations.

In presenting their PEP study on the Impact of fiscal reforms on poverty and income distribution in Tanzania, selected under the PAGE II initiative in 2017, the research team explained how reducing the VAT rate on capital commodities can help the Tanzanian economy meet the country’s industrialization development targets.

Specifically, the team described how the government could help to reduce unemployment, income inequality and poverty in Tanzania while protecting the important industrial and construction sectors by letting spending adjust to a reduced VAT on capital commodities. Find out more about the team’s research methods, findings, and policy recommendations in PEP Policy Brief 190.
 

Main outcomes

During the event, the team received valuable feedback from a number of participants. Representatives of the Ministry of Agriculture, TRA, National Bureau of Statistics, and an NGO suggested how further research could expand on the team’s findings to support the work of their respective organisations. 

Furthermore, Mr. Samson Mangasin, a policy advisor for the Ministry of Finance and Planning and a member of the Government Budget Committee, suggested that the team should continue their research to find the optimal VAT reduction.

Meanwhile, Dr. Abdul Mussa Ally, Principal Finance Management Officer at the MoFP, expressed interest in the team’s methodology on behalf of the Ministry. “We would be interested in these simulation techniques to know how different scenarios of fiscal issues—such as taxes and government spending—will impact the national economy and affect poor households,” he said.

A journalist from the Daily News, a public daily national newspaper, reported from the conference. News of the conference was published on the paper’s front page and incited additional interest in the team’s project.

Following the publication of the team’s findings and recommendations in the Daily News, team member Dr. Joel Mmasa was invited to present the project to the National Task Force on Tax Reform. The task force is an advisory body of the MoFP currently receiving recommendations for the 2019/20 budget. 

 

The research team organized the event with support from PEP and in collaboration with the University for Dodoma. 

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