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Are the South African fiscal authorities serious about tax base broadening?

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  • Estian Calitz

    () (Emeritus Professor, Department of Economics, Stellenbosch University)

Abstract

Developing countries are often advised to broaden their tax base. The South African fiscal authorities have at various times claimed to do so, inter alia in order to reduce tax rates. The paper explores whether they have been serious about base broadening. Various conceptual issues are raised in defining base broadening and base erosion. Drawing on budget documentation, tax measures of base broadening and erosion from 1994 to 2018 were tabulated. A selection of the most salient nonquantified measures and all quantified measures are presented. Net budgeted base broadening (2018 prices) of R1.7 billion is reported, in the process of which various tax increases and decreases were also implemented. The need for a much more systematic quantification of all base-broadening and base-erosion tax measures in South Africa is indicated. This should not only occur at the time of announcement but especially to track and report the actual outcome of all such measures in subsequent years.

Suggested Citation

  • Estian Calitz, 2019. "Are the South African fiscal authorities serious about tax base broadening?," Working Papers 06/2019, Stellenbosch University, Department of Economics.
  • Handle: RePEc:sza:wpaper:wpapers320
    as

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    File URL: https://www.ekon.sun.ac.za/wpapers/2019/wp062019/wp062019.pdf
    File Function: First version, 2019
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    References listed on IDEAS

    as
    1. Ali, Merima & Fjeldstad, Odd-Helge & Sjursen, Ingrid Hoem, 2014. "To Pay or Not to Pay? Citizens’ Attitudes Toward Taxation in Kenya, Tanzania, Uganda, and South Africa," World Development, Elsevier, vol. 64(C), pages 828-842.
    2. Emran, M. Shahe & Stiglitz, Joseph E., 2005. "On selective indirect tax reform in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 599-623, April.
    3. 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.
    4. Black, Philip & Calitz, Estian & Steenkamp, Tjaart, 2015. "Public Economics," OUP Catalogue, Oxford University Press, edition 6, number 9780199059089.
    5. Estian Calitz & Sally Wallace & Le Roux Burrows, 2013. "The Impact of Tax Incentives to Stimulate Investment in South Africa," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1306, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    6. Das-Gupta, Arindam & Lahiri, Radhika & Mookherjee, Dilip, 1995. "Income tax compliance in India: An empirical analysis," World Development, Elsevier, vol. 23(12), pages 2051-2064, December.
    7. Robina Ather Ahmed & Mark Rider, 2013. "Using Microdata to Estimate Pakistan’s Tax Gap by Type of Tax," Public Finance Review, , vol. 41(3), pages 334-359, May.
    8. Johan Willner & Lena Granqvist, 2002. "The Impact on Efficiency and Distribution of a Base-Broadening and Rate-Reducing Tax Reform," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 9(3), pages 273-294, May.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Tax base broadening; Tax efficiency; Tax base erosion; Tax evasion and avoidance; Tax measures; South African fiscal authorities;

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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