A Microsimulation Model of the Slovak Individual Income Tax

A Microsimulation Model of the Slovak Individual Income Tax was developed for the Slovak Ministry of Finance by the U.S. Treasury Department's Office of Technical Assistance. The development of the model had four principal objectives. The first was to establish a capacity within the Ministry of Finance to estimate the revenue and distributional effects of proposed individual tax law changes.The second was to convince Ministry officials that the potential benefits of such methods of analysis would justify the costs of developing data gathering and tax analysis capacities to support the use, maintenance, and improvement of such methods. The third was to provide a tool for educating analysts about the structure of microsimulation modeling and establish a foundation for developing more sophisticated and flexible models. The fourth was to highlight the dependence of the Ministry on the tax administration ( and other agencies) for current, relevant, and accurate data and to emphasize the importance of establishing institutional arrangements for the provision of such data.