This week, Ghana's Ministry of Finance has organised and run a training workshop for civil servants from the Ministry and the Revenue Authority on GHATAX, the microsimulation model built by the IFS's TAXDEV team for Ghana. The model, built in conjunction with Ministry staff, allows analysts to examine the revenue and distributional impacts of tax and transfer policies and policy reforms, and is designed to provide additional information to the policymaking process. Understanding the impact of policies on households with different characteristics (e.g. high, middle and low incomes) is key to assessing whether they are having their intended impact or could be amended to improve outcomes.
At the training event, Ministry staff who worked with the IFS on the initial development of the model trained additional personnel on how it can be used, and how its outputs can be interpreted. This includes understanding the limitations of the model given the input data available, and the sometimes strong assumptions needed to attribute the impact of taxes to particular households.
This builds on earlier training provided by the IFS TAXDEV team to Ministry staff. Looking forwards, the IFS and Ghana's Ministry of Finance plan to update and improve GHATAX, making use of more recent and more detailed data to increase its accuracy for policy analysis.