Analysis of Fiscal Policy Reform in Senegal: A CGE Analysis

The Emerging Senegal Plan (Plan Senegal Emergent, PSE) launched a new development model which should allow the acceleration of the economic and social development of Senegal, in the medium and long term (2035). The aim is to accelerate growth. The target set over the period 2014-2018 is between 7 and 8%. Appropriate taxation requires land reform as well as skilled technicians. It appears that property taxes are underused in Senegal although they are promising as progressive, administratively feasible and increasing along with urban sprawl. Finally, it should be stressed that real estates are is effective and fair form of taxation (Norregaard, 2013). The aim of this paper is to quantify some fiscal policy reforms in Senegal support agriculture and other sectors essential to the food and nutrition security (FNS). The model used in this study is a comparative static variant of the STatic Applied General Equilibrium model (STAGE) (McDonald, 2007) specifically extended for the context of the developing countries (STAGE-DEV)(Aragie et al., 2017). The model is thus calibrated to 2014 Senegal SAM that is built for the purpose of this analyse. We simulate the impacts of changes in VAT, input tax and income tax on the Senegal economy with a special focus on agriculture and rural sectors as well as food and nutrition security.