INDOMOD – an Indonesian tax-benefit microsimulation model

The aim of this project has been to develop an Indonesian tax benefit microsimulation model, or ‘INDOMOD’ for in-house use by the Government of Indonesia. The project involves (i) preparing an underpinning dataset for the model using SUSENAS; (ii) collating Indonesia’s tax and benefit policy rules; (iii) converting the policies into instructions for the EUROMOD software which is the ‘engine’ for the model; (iv) validating the simulations using administrative data. The main objective is that the model is a sustainable in-house resource for the Government of Indonesia and so ha been undertaken with key government officials from the outset. A country report and manual have been prepared and initial training undertaken in 2019.

During the course of 2020 the model is being updated and used to simulate the effects of COVID-19 and the impact of the Indonesian government’s programs to support the poorest sector of the community in the face of the pandemic. In addition a number of provincial models will be created alongside the parent INDOMOD.

Collaborators: The project is coordinated by the Ministry of Finance of the Government of Indonesia, which will set up a Working Group comprising representatives of government departments. UNICEF Indonesia and SASPRI have entered into an agreement to support the Government of Indonesia in building INDOMOD, with additional technical advice from the EUROMOD team at the University of Essex.