**Table 1: Central Government Financial Operations, 2006** - **13 (In percent of Gross Domestic Product; unless otherwise indicated)**

||2006|2007|2008|2009|2010|2011|2012|2013|
|---|---|---|---|---|---|---|---|---|
|**Total revenue and grants**|**12.0**|**10.4**|**13.1**|**14.9**|**21.1**|**18.0**|**20.1**|**17.4**|
|Total revenue|7.9|9.0|11.5|10.3|12.1|12.4|14.9|13.0|
|Customs and excise|2.9|3.3|4.0|3.8|4.1|4.6|5.2|4.8|
|Direct and indirect taxes|2.4|3.1|4.0|3.8|4.2|4.4|4.9|5.1|
|Petroleum (royalties and taxes)|2.0|1.9|2.3|0.9|1.4|1.7|1.3|1.2|
|Administrative revenues|0.6|0.8|1.1|1.8|2.3|1.7|3.5|1.6|
|Total grants|4.1|1.4|1.6|4.6|9.0|5.6|5.2|4.4|
|**Total expenditure**|**13.9**|**12.5**|**14.3**|**16.0**|**16.9**|**19.1**|**19.5**|**19.1**|
|Current expenditure|9.4|10.5|11.6|11.2|9.3|10.9|10.4|10.5|
|Capital expenditure|2.0|1.4|2.1|3.2|6.8|5.7|7.0|7.7|
|Exceptional expenditure<sup>1</sup>|2.6|0.5|0.6|1.6|0.8|2.6|2.1|1.0|
|Change in arrears (increase = +)|-0.1|-0.1|-0.2|-0.1|-0.2|-0.3|-0.2|-0.3|
|Float (increase = +)|0.3|0.0|0.0|0.0|0.0|0.0|0.0|0.0|
|Central bank operational result|-0.3|-0.2|-0.3|-0.5|-0.6|0.0|-0.1|0.0|
|**Overall fiscal balance (cash basis, before**<br>**interest rescheduling)**|**-2.0**|**-2.5**|**-1.7**|**-1.7**|**3.4**|**-1.4**|**0.3**|**-2.0**|
|Domestic fiscal balance|-0.7|-0.1|0.4|-1.5|1.1|-1.1|1.2|0.2|

Sources: Congolese authorities and IMF staff estimates 1Exceptional expenditure includes spending for the Demobilization, Disarmament, and Reintegration (DDR) program, cost of the elections, payments for retirement allowances, repayments of domestic arrears, and payments for bank restructuring.

# **3.2 Data**

Data come from the 2012 wave of the 1-2-3 survey, representative of the DRC civilian non-institutionalized population. The data, containing anonymous information on household expenditure and composition, are obtained from the DRC National Institute of Statistics. They are organized to reflect annual expenditures. The 1-2-3 survey provides rich socioeconomic data along with large sample size, which allows detailed analysis by area of residence, poverty status, and quintile. The 1-2-3 survey further provides data on quantities and prices of food commodities; but there is some concern about pricing the food commodities, as some households engage in selfconsumption. Good practice in the analysis of welfare data recommends the use of farm-gate prices among households that consume their own production (A. Deaton and S. Zaidi, 2002). Unfortunately, our data do not include enough information to compute reliably such prices. Thus, we rely on median cluster prices for the prices of the aggregate commodities. We believe that this would not distort our results. To the extent that markets exist and that substitution effects are accounted for in the demand systems we use in this paper, households would consume their own production provided they gain from so doing at the prevailing prices that include taxes. Furthermore, it is not clear whether households do not incur any tax burden through the taxes they pay for agricultural inputs to their outputs. The farm-gate prices of such outputs are then likely to reflect these increased input prices.

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