IDEAS home Printed from https://ideas.repec.org/p/pre/wpaper/201611.html

Impact of Activity Tax in the Property-Owning and Subletting of Fixed Property Sectors on the South African Economy: A CGE Analysis

Author

Listed:
  • Lumengo Bonga-Bonga

    (Faculty of Economic and Financial Sciences, University of Johannesburg)

  • Jean Luc Erero

    (South African Revenue Service and Faculty of Economic and Financial Sciences, University of Johannesburg)

  • Rangan Gupta

    (Department of Economics, University of Pretoria)

Abstract

This paper analyses the economy-wide impact of an increase in property tax in South Africa by disaggregating the real property sector into two subcomponents, namely the property-owning and subletting of fixed property sectors. Use is made of the Computable General Equilibrium model for this end. The results of the simulation show that increasing taxation in the property sector reduces demand for all types of labour in South Africa. Moreover, the results of the simulations show that a tax increase in the property sector reduces economic activity in the country and offsets a possible increase in government revenue. This paper suggests that the South African government should be cautious about resorting to an increase in tax in the property sector to raise its revenue.

Suggested Citation

  • Lumengo Bonga-Bonga & Jean Luc Erero & Rangan Gupta, 2016. "Impact of Activity Tax in the Property-Owning and Subletting of Fixed Property Sectors on the South African Economy: A CGE Analysis," Working Papers 201611, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:201611
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Dani Rodrik, 2008. "Understanding South Africa's economic puzzles," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(4), pages 769-797, October.
    2. Theresa Alton & Channing Arndt & Rob Davies & Faaiqa Hartley & Konstantin Makrelov & James Thurlow & Dumebi Ubogu, 2012. "The Economic Implications of Introducing Carbon Taxes in South Africa," WIDER Working Paper Series wp-2012-046, World Institute for Development Economic Research (UNU-WIDER).
    3. Alton, Theresa & Arndt, Channing & Davies, Rob & Hartley, Faaiqa & Makrelov, Konstantin & Thurlow, James & Ubogu, Dumebi, 2012. "The Economic Implications of Introducing Carbon Taxes in South Africa," WIDER Working Paper Series 046, World Institute for Development Economic Research (UNU-WIDER).
    4. Mark Horridge, 2000. "ORANI-G: A General Equilibrium Model of the Australian Economy," Centre of Policy Studies/IMPACT Centre Working Papers op-93, Victoria University, Centre of Policy Studies/IMPACT Centre.
    5. Gordon, Roger & Li, Wei, 2009. "Tax structures in developing countries: Many puzzles and a possible explanation," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 855-866, August.
    6. repec:wbk:wbpubs:18237 is not listed on IDEAS
    7. repec:unu:wpaper:wp2012-46 is not listed on IDEAS
    8. repec:wbk:wbpubs:13920 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kambale Kavese & Andrew Phiri, 2020. "A partial general equilibrium analysis of fiscal policy injection on inequality in South Africa," Working Papers 2001, Department of Economics, Nelson Mandela University, revised Jan 2020.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rulof Petrus Burger & Lodewicus Charl Coetzee & Carl Friedrich Kreuser & Neil Andrew Rankin, 2017. "Income and Price Elasticities of Demand in South Africa: An Application of the Linear Expenditure System," South African Journal of Economics, Economic Society of South Africa, vol. 85(4), pages 491-514, December.
    2. Partnership for Market Readiness, 2016. "Modeling the Impact on South Africa’s Economy of Introducing a Carbon Tax," World Bank Publications - Reports 25762, The World Bank Group.
    3. Qiao-Mei Liang & Qian Wang & Yi-Ming Wei, 2013. "Assessing the Distributional Impacts of Carbon Tax among Households across Different Income Groups: The Case of China," Energy & Environment, , vol. 24(7-8), pages 1323-1346, December.
    4. Qian Wang & Qiao-Mei Liang, 2015. "Will a carbon tax hinder China’s efforts to improve its primary income distribution status?," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 20(8), pages 1407-1436, December.
    5. Fant, Charles & Adam Schlosser, C. & Strzepek, Kenneth, 2016. "The impact of climate change on wind and solar resources in southern Africa," Applied Energy, Elsevier, vol. 161(C), pages 556-564.
    6. Jessika A. Bohlmann & Roula Inglesi-Lotz & Heinrich R. Bohlmann, 2022. "Carbon Tax and its Impact on South African Households," Working Papers 202248, University of Pretoria, Department of Economics.
    7. Erero Jean Luc, 2019. "Impact of excise tax on the South African economy: A dynamic CGE approach," Journal of Economics and Management, Paradigm, vol. 37(3), pages 23-44, September.
    8. Erero Jean Luc, 2020. "The effects of illicit cigarette trade in South Africa: A CGE analysis," Journal of Economics and Management, Paradigm, vol. 40(2), pages 5-35, June.
    9. Florian Landis & Peter Heindl, 2019. "Renewable Energy Targets in the Context of the EU ETS: Whom do They Benefit Exactly?," The Energy Journal, , vol. 40(6), pages 129-170, November.
    10. Yıldıran, Nezihe & Akyol, İzem Azra & Işık, Mehmet Ali, 2025. "Harnessing solar energy: Feasibility assessment of 75 MW solar PV plant in a community in South Africa," Renewable Energy, Elsevier, vol. 253(C).
    11. Zhang, Da & Rausch, Sebastian & Karplus, Valerie J. & Zhang, Xiliang, 2013. "Quantifying regional economic impacts of CO2 intensity targets in China," Energy Economics, Elsevier, vol. 40(C), pages 687-701.
    12. Rulof Petrus Burger & Lodewicus Charl Coetzee & Carl Friedrich Kreuser & Neil Andrew Rankin, 2017. "Income and Price Elasticities of Demand in South Africa: An Application of the Linear Expenditure System," South African Journal of Economics, Economic Society of South Africa, vol. 85(4), pages 491-514, December.
    13. Canavire-Bacarreza, Gustavo & Martínez-Vázquez, Jorge & Vulovic, Violeta, 2013. "Taxation and Economic Growth in Latin America," IDB Publications (Working Papers) 4583, Inter-American Development Bank.
    14. Darma Mahadea, 2012. "Prospects Of Entrepreneurship To The Challenge Of Job Creation In South Africa," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 17(04), pages 1-17.
    15. Catalina Granda Carvajal, 2015. "Informality and macroeconomic volatility: do credit constraints matter?," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 42(6), pages 1095-1111, November.
    16. Kym Anderson & Signe Nelgen & Ernesto Valenzuela & Glyn Wittwer, 2009. "Economic contributions and characteristics of grapes and wine in AustraliaÂ’s wine regions," Centre for International Economic Studies Working Papers 2009-01, University of Adelaide, Centre for International Economic Studies.
    17. António Afonso & Ana Patricia Montes & José M. Domínguez, 2024. "Measuring Tax Burden Efficiency in OECD Countries: An International Comparison," CESifo Working Paper Series 11333, CESifo.
    18. Arief Anshory Yusuf, 2008. "INDONESIA-E3: An Indonesian Applied General Equilibrium Model for Analyzing the Economy, Equity, and the Environment," Working Papers in Economics and Development Studies (WoPEDS) 200804, Department of Economics, Padjadjaran University, revised Sep 2008.
    19. Cao, Chunfang & Li, Xiaoyang & Xia, Changyuan, 2021. "The complicit role of local government authorities in corporate bribery: Evidence from a tax collection reform in China," China Economic Review, Elsevier, vol. 65(C).
    20. Carlos Bethencourt & Fernando Perera-Tallo, 2020. "Human Capital, Economic Growth, and Public Expenditure," ADBI Working Papers 1066, Asian Development Bank Institute.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pre:wpaper:201611. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Rangan Gupta (email available below). General contact details of provider: https://edirc.repec.org/data/decupza.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.