Purchased consumption items are identified from the survey. The first- and second-round effects of VAT and excise taxes applied to those items are simulated using the SAM. We first calculated the price burden of all goods and services by using their effective tax rate. We then estimated the price burden on consumers resulting from indirect taxes paid for inputs of production to estimate how taxes on petroleum and coal affect the prices of final goods and services. For VAT, the second-round effects are estimated for exempted items.

The value of in-kind education and health services to individuals is estimated based on total government spending on these services. Copayments are deducted when the beneficiary paid any fee or contribution to use them. We used 2016/17 regional and federal administrative spending data to estimate the cost of providing education by level (primary, secondary, higher) and health services. To fill the data gap for 2018/19, we deflated the 2016/17 spending using the average annual growth rate of spending for each region.<sup>3</sup> We assume that each student enrolled in a public school in each region receives the education benefit. We calculate per-pupil education cost for each region by dividing total spending by the number of primary and secondary students enrolled. For tertiary education, total federal spending is divided by the number of students enrolled in post-secondary education. Most spending on tertiary education is capital spending, notably investments in infrastructure for the recent expansion in higher education; because the benefit is expected to accrue over several years, the analysis considers only a portion of the spending.<sup>4</sup> The per-beneficiary health benefit is obtained by dividing total health spending by the number of public health service users.<sup>5</sup> Indirect subsidies applied to wheat in urban areas and kerosene in all parts of the country<sup>6</sup> are estimated based on what the household spends on these items. The total value of the subsidy is calculated based on subsidy rates per kilogram for wheat and per liter for kerosene, as derived from government import and sales data.<sup>7</sup> This study does not include such categories as corporate income, international trade, and infrastructure investments, although these directly influence income distribution and poverty. It also does not consider the operations of state-owned enterprises. Moreover, this study does not consider behavioral, life cycle, or general equilibrium effects, and it assumes that both consumer demand and labor supply are perfectly inelastic. In estimating the monetized values of in-kind transfers, our calculations do not consider possible differences in the quality of services delivered to different income groups in each region. Nor do we capture whether individuals fail to visit health centers because of expected fees, which more heavily burden poorer individuals. Furthermore, we treat the social security contributions of employees as saving. The study does not evaluate whether specific taxes and spending are desirable.

> 3 The average annual growth rate of education and health spending is estimated based on nine years of spending data. 4 Because these expenditures would also serve future generations, we took into account only 10 percent of capital spending in tertiary education as the benefit current students are receiving.

> 5 We estimate public health service beneficiaries by region and nationally using ESS data.

> 6 As it is difficult to identify which household in which area is benefitting from the wheat subsidy, we assume that it targets the entire urban population. This assumption is based on evidence that indicates subsidized wheat is available in most urban centers (see World Bank 2018).

> 7 One data gap in wheat subsidy allocation is the lack of disaggregated consumption items for wheat products. We therefore calculate the subsidy based on wheat consumption in any form.

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