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Revisiting the impact of direct taxes and transfers on poverty and inequality in South Africa

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  • Mashekwa Maboshe
  • Ingrid Woolard

Abstract

This paper uses a recent household survey and the CEQ framework to revisit and extend previous research on the impact of fiscal policy on income redistribution, and poverty in South Africa. We find, in accordance with previous research, that direct taxes and cash transfers are overall progressive and reduce inequality and poverty. Our disaggregated analyses, however, reveal that medical and interest tax benefits are regressive. We also find that certain social transfers provided to some minority population groups are not particularly well targeted.

Suggested Citation

  • Mashekwa Maboshe & Ingrid Woolard, 2018. "Revisiting the impact of direct taxes and transfers on poverty and inequality in South Africa," WIDER Working Paper Series wp-2018-79, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2018-79
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    References listed on IDEAS

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    1. Nora Lustig, 2017. "Fiscal Policy, Income Redistribution and Poverty Reduction in Low and Middle Income Countries - Working Paper 448," Working Papers 448, Center for Global Development.
    2. Nora Lustig, 2017. "Fiscal Policy, Income Redistribution and Poverty Reduction in Low and Middle Income Countries," Working Papers 1701, Tulane University, Department of Economics, revised Aug 2017.
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    Cited by:

    1. Aroop Chatterjee & Léo Czajka & Amory Gethin, 2021. "Can Redistribution Keep Up with Inequality? Evidence from South Africa, 1993-2019," Working Papers halshs-03364039, HAL.
    2. Janina Hundenborn & Ingrid Woolard & Murray Leibbrandt, 2016. "Drivers of Inequality in South Africa," SALDRU Working Papers 194, Southern Africa Labour and Development Research Unit, University of Cape Town.
    3. Yaru, Mohammed Aminu & Adisa-Ohiaka, Ubaydah, 2022. "Indirect Taxation and Poverty in Sub-Saharan Africa: An Empirical Evidence from Panel Data Analysis," African Journal of Economic Review, African Journal of Economic Review, vol. 10(5), December.
    4. Joseph Nyamapheni & Zurika Robinson, 2021. "Determinants of Tax Morale: Cross-Sectional Evidence from Africa," The Journal of Accounting and Management, Danubius University of Galati, issue 3(11), pages 84-99, December.
    5. Amina Ebrahim & Rebone Gcabo & Lilian Khumalo & Jukka Pirttilä, 2019. "Tax research in South Africa," WIDER Working Paper Series wp-2019-9, World Institute for Development Economic Research (UNU-WIDER).
    6. Haydeeliz Carrasco & Hamidou Jawara & Moritz Meyer, 2022. "The Effects Of Fiscal Policy On Inequality And Poverty In The Gambia," Commitment to Equity (CEQ) Working Paper Series 117, Tulane University, Department of Economics.
    7. Murray Leibbrandt & Vimal Ranchhod & Pippa Green, 2018. "Taking stock of South African income inequality," WIDER Working Paper Series wp-2018-184, World Institute for Development Economic Research (UNU-WIDER).
    8. Murray Leibbrandt & Vima Ranchhod & Pippa Green, 2018. "Taking stock of South African income inequality," WIDER Working Paper Series 184, World Institute for Development Economic Research (UNU-WIDER).
    9. Jeanne Terblanche & Dawie van Lill & Hylton Hollander, 2023. "Fiscal policy and dimensions of inequality in South Africa: A time-varying coefficient approach," Working Papers 05/2023, Stellenbosch University, Department of Economics.
    10. Janina Hundenborn & Ingrid Woolard & Murray Leibbrandt, 2016. "Drivers of Inequality in South Africa," SALDRU Working Papers 194, Southern Africa Labour and Development Research Unit, University of Cape Town.

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