Tax and Expenditure Policies in Comoros

This paper assesses the distributional impact of tax and expenditure policies in Comoros using a microsimulation framework based on the Commitment to Equity (CEQ) methodology and household survey data. It evaluates key revenue-raising reforms under the IMF Extended Credit Facility and post-WTO accession, including tax base broadening, the removal of tax expenditures, and changes in border taxation. The analysis also examines the incidence of fuel subsidies. Results show that while proposed reforms effectively increase revenues, their impact on inequality is limited. Tax exemptions and fuel subsidies are found to be regressive, disproportionately benefiting higher-income households, highlighting the need for better-targeted redistribution mechanisms.