The Impact of Rotavirus Vaccination on Discounted Net Tax Revenue in Egypt
- First Online:
- 129 Downloads
We evaluated national rotavirus (RV) immunization programme costs to estimate how resulting changes in morbidity and mortality will influence government fiscal accounts over time. The assumption was that increased childhood survival in vaccinated cohorts leads to increased numbers of children consuming government resource, and an increased number of future tax payers.
Our objective was to evaluate the difference in lifetime discounted net tax revenue generated by RV vaccinated and unvaccinated cohorts from the Egyptian government perspective.
The model framework adopts the Egyptian government perspective for RV immunization costs (year 2009 values) and all government transfers (e.g. education costs, health costs, pensions). To reflect the government tax revenue, we applied a fixed income tax burden to earnings over the lifetime of vaccinated and unvaccinated cohorts. At each year of the model, we derive net taxes (gross taxes less transfers) discounted to the immunization year to reflect the present value of RV vaccination investment costs.
Projected incremental net present values of the vaccinated cohort versus the unvaccinated cohort are $US6.1 million, $US58.1 million and $US55.7 million at 25-, 50- and 72-year time horizons, respectively. The internal rate of return for the government based on RV vaccination at years 25, 50 and 72 was 10.8%, 15.1% and 14.9, respectively. Within the first 5 years of vaccination, 76% of vaccine acquisition costs were offset due to direct and indirect cost savings attributed to a reduction in RV-related disease burden. Investments in RV vaccination in a single year are entirely offset when the vaccinated cohort of newborns reach 22 years of age.
The government perspective is useful for evaluating investments in RV vaccination because of ongoing government transfers and tax receipts attributed to changes in RV-attributed morbidity and mortality. The analysis described here illustrates that investing in RV offers tangible long-term fiscal benefits for government over many generations that would not ordinarily be captured in economic evaluations typically applied to healthcare interventions.
- 1.Bloom DE, Canning D, Weston M. The value of vaccination. World Econ 2005; 6(3): 15–39Google Scholar
- 3.WHO Commission on Macroeconomics and Health. Health, economic growth and poverty reduction: the report of Working Group I of the Commission on Macroeconomics and Health. Geneva: World Health Organization, 2002Google Scholar
- 5.World Health Organization. WHO model list of essential medicines. 16th rev. list. Geneva: WHO, 2010 MarGoogle Scholar
- 7.World Health Organisation. WHO guide to identifying the economic consequences of disease and injury. Geneva: WHO, 2009Google Scholar
- 8.Sancak C, Velloso R, Xing J. Tax revenue response to the business cycle [IMF working paper no. WP/10/71]. Washington, DC: IMF, 2010 MarGoogle Scholar
- 9.Suhrcke M, McKee M, Arce RS, et al. The contribution of health to the economy in the European Union. Luxembourg: Office for Official Publications of the European Communities, 2005Google Scholar
- 11.National Institute for Health and Clinical Excellence. Guide to the methods of technology appraisal [publication no. N0515]. London: NICE, 2004 AprGoogle Scholar
- 13.Standaert B, Harlin O, Desselberger U. The financial burden of rotavirus disease in four countries of the European Union. Pediatr Infect Dis J 2008; 27(1): S20–7Google Scholar
- 18.Bonin H, Patxot C. Generational accounting as a tool to assess fiscal sustainability: an overview of the methodology [discussion paper no. 990]. Bonn: Institute for the Study of Labor, 2004 JanGoogle Scholar
- 20.CAPMAS. Quarterly labor force sample survey: labor force, employment and unemployment in Egypt [online]. Available from URL: http://www.capmas.gov.eg/?lang=2 [Accessed 2012 May 15]
- 21.WHO. Egyptian life tables 2009 [online]. Available from URL: http://www.who.int/healthinfo/statistics/mortality_life_tables/en/ [Accessed 2010 Nov 23]
- 25.CAPMAS. Annual bulletin for employment, wages, and work hours statistics [online]. Available from URL: http://www.capmas.gov.eg/news.aspx?lang=2&nid=552 [Accessed 2012 May 15]
- 26.International Organization of Pension Supervisors. IOPS country profile: Egypt [online]. Available from URL: http://www.iopsweb.org/dataoecd/32/11/42952582.pdf [Accessed 2012 May 12]
- 27.Ministry of Finance. The income tax law no. 91 of 2005 [online]. Available from URL: http://www.mof.gov.eg/MOFGallerySource/english/IncomeTaxLaw.pdf [Accessed 2010 Aug 18]
- 28.World Bank. Labor and social protection [online]. Available from URL: http://data.worldbank.org/topic/labor-and-social-protection [Accessed 2011 Jul 29]
- 29.Central Intelligence Agency. The world factbook: Egypt, 2011 [online]. Available from URL: https://www.cia.gov/library/publications/the-world-factbook/geos/eg.html [Accessed 2011 Feb 15]
- 30.Linhares A, Valzquez FR, Perez-Schael I, et al. Efficacy and safety of an oral live attenuated human rotavirus vaccine against rotavirus gastroenteritis during the first 2 years of life in Latin American infants: a randomized, double blind, placebo-controlled phase III study. Lancet 2008; 371(9619): 1181–9PubMedCrossRefGoogle Scholar
- 32.Flannery B. How have rotavirus vaccines worked in developing countries in Latin America? 9th International Rotavirus Symposium; 2010 Aug 2–3; Johannesburg [online]. Available from URL: http://www.sabin.org/files/uploads/B%20Flannery.pdf [Accessed 2011 Jul 29]
- 38.World Bank. Health expenditure per capita (current US$) [online]. Available from URL: http://data.worldbank.org/indicator/SH.XPD.PCAP [Accessed 2011 Jul 29]
- 39.El-Zanaty F, Way A. Egypt demographic and health survey 2008 [online]. Available from URL: http://www.measuredhs.com/pubs/pdf/FR220/FR220.pdf [Accessed 2011 Jul 30]
- 40.World Bank. World development indicators 2005 [online]. Available from URL: http://data.worldbank.org/data-catalog/world-development-indicators [Accessed 2011 Jul 30]
- 41.The Egyptian-British Chamber of Commerce. Tax policies in Egypt [online]. Available from URL: http://www.theebcc.com/files/EBCC%20Report%20-%20Tax%20Policies%20in%20Egypt.doc [Accessed 2011 Aug 10]
- 43.Prušvic D, Pavlokova K. Generational accounting in European health care systems. Czech J Econ Finance 2010; 60(5): 378–99Google Scholar
- 44.OECD. Education at a glance 2008. Paris: OECD, 2008 SepGoogle Scholar
- 47.Directorate-General for Economic and Financial Affairs, European Commission. Sustainability report 2009: European economy 9. Luxembourg: Office for Official Publications of the European Communities, 2009Google Scholar