This study covers the majority of indirect taxes and the personal income tax. The team has information on Zambia’s personal income tax (PAYE). However, the team does not have enough information to allocate CIT burdens to households in the micro-data set nor enough administrative information to allocate Social Insurance contributions.

Zambia’s overall revenue from taxes is lower than average for fiscal systems in South and East Africa. When measured as percent GDP, Zambia’s revenues from direct (income, profits, and capital gains) taxes are approximately 1.5 percentage points higher than the East African average but approximately 2 percentage points lower than the South African Development Community (SADC) average. Also as percent GDP, Zambia’s revenues from indirect (sales of goods and services) taxes are lower than either the East African or SADC average, Nontax revenues––including social security contributions and natural resource royalties––also are lower in Zambia than either the East African or SADC average (Table 3).

||<br>**Tabl**|**e 3. Centra**|<br>**l Government: Tax**|<br>**Structure and Ta**<br>(inpercent of GD|Taxes on income,<br>**x Levels for EAC and**<br>P)|<br>**SADC Countries**||Taxes on|
|---|---|---|---|---|---|---|---|---|
||Total<br>Revenue|Tax<br>Revenue|Taxes, percent of<br>fiscal year GDP|Taxes on goods<br>and services|<br>profits, and capital<br>gains|Taxes payable<br>by corporations|Taxes payable<br>by individuals|international trade<br>and transactions|
|Rwanda|24.4|15.3|0.3|7.5|6.5|-|-|1.2|
|Burundi|23.0|12.1|0.3|8.1|2.9|-|-|1.1|
|Kenya|20.2|17.7|0.3|6.8|9.0|-|-|1.3|
|Tanzania|15.1|12.4|0.0|5.2|4.5|-|-|0.9|
|Uganda|15.1|12.9|0.0|7.1|4.6|1.0|2.1|1.2|
|**_Average EAC_**|**19.6**|**14.1**|**0.2**|**6.9**|**5.5**|**1.0**|**2.1**|**1.2**|
|**Zambia**|**17.5**|**14.0**|**7.3**|**6.1**|**6.9**|**1.5**|**5.2**|**1.0**|
|Angola|24.8|22.2|0.2|1.4|18.5|-|-|1.1|
|Botswana|39.2|26.9|19.1|4.9|10.1|-|-|11.3|
|Congo, Democratic Republic|16.1|10.4|0.0|4.5|3.9|-|-|2.0|
|Lesotho|59.4|50.0|193.0|9.9|14.0|4.0|6.8|0.8|
|Madagascar|11.8|10.0|0.0|2.4|2.5|-|-|5.1|
|Malawi|22.0|16.2|0.6|6.3|8.3|-|-|1.5|
|Mauritius|22.5|19.1|4.7|11.3|5.6|2.5|2.0|0.3|
|Mozambique|29.4|21.5|3.6|9.3|9.0|-|-|2.0|
|Namibia|33.7|32.2|19.7|8.1|13.3|4.6|8.3|10.5|
|Seychelles|34.3|30.3|165.3|15.1|9.9|4.8|5.2|1.8|
|South Africa|29.7|24.9|0.6|9.1|14.9|5.4|9.5|-0.2|
|Swaziland|28.0|27.1|52.0|5.8|7.7|3.0|4.7|13.5|
|Zimbabwe|27.3|26.3|184.0|11.7|8.6|2.7|6.0|2.7|
|**_Average SADC_**|**_28.3_**|**_23.7_**|**_46.4_**|**_7.6_**|**_9.5_**|**_3.5_**|**_6.0_**|**_3.8_**|
|**_Median SADC_**<br>Source: World Economic Outlo|**_27.7_**<br>ok.|**_23.6_**|**_6.0_**|**_7.2_**|**_8.8_**|**_3.5_**|**_5.6_**|**_1.9_**|

_Sources_ : WEO. _Note_ : Data in the table correspond to 2015 preliminary.

# METHODOLOGY, DATA, AND ASSUMPTIONS

## Methodology

The impact of fiscal policy on micro-level welfare indicators is estimated by allocating fiscal policy elements, programs, expenditures, or revenue collections to individuals and households appearing in the 2015 Living Conditions Monitoring Survey (LCMS). Overall, the team’s framework for allocations and post-allocation analysis follows the methodology developed by the Commitment to Equity (CEQ) Institute to assess fiscal policy (Lustig 2016). To examine the amount of redistribution accomplished (among others) and therefore the impact of the fiscal system on poverty and inequality, the study creates measures of income––or “Income Concepts”––that exclude (“pre-fiscal”) and include (“post-fiscal”) these fiscal policy elements. Figure 5 summarizes the construction of these income concepts. Market Income, or prefiscal income, is constructed by totaling for an individual all private sources of income: wages, capital income, private transfer receipts, and gifts. The income concepts appearing in blue boxes below Market 14