IDEAS home Printed from https://ideas.repec.org/p/unu/wpaper/wp-2025-17.html

On the redistributive impact of the personal income tax: Evidence from South Africa

Author

Listed:
  • Nadine Riedel
  • Ida Zinke

Abstract

South Africa is one of the most unequal economies globally. In this paper, we examine the design of its personal income tax (PIT), with a focus on its redistributive function. We apply the Pfähler decomposition method to analyse the redistributive effects of key components of the South African PIT system, including the marginal tax rate schedule, the definition of gross taxable income, and the provision of tax deductions and tax credits.

Suggested Citation

  • Nadine Riedel & Ida Zinke, 2025. "On the redistributive impact of the personal income tax: Evidence from South Africa," WIDER Working Paper Series wp-2025-17, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2025-17
    as

    Download full text from publisher

    File URL: https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp2025-17-on-redistributive-impact-personal-income-tax.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Slemrod, Joel & Kopczuk, Wojciech, 2002. "The optimal elasticity of taxable income," Journal of Public Economics, Elsevier, vol. 84(1), pages 91-112, April.
    2. Senia Nhamo & Edinah Mudimu, 2020. "Shifting from deductions to credits: Unpacking the distributional effects of medical expenditure considerations in South Africa," WIDER Working Paper Series wp-2020-30, World Institute for Development Economic Research (UNU-WIDER).
    3. 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).
    4. Agustin Redonda & Christopher Axelson, 2021. "Assessing pension-related tax expenditures in South Africa: Evidence from the 2016 retirement reform," WIDER Working Paper Series wp-2021-54, World Institute for Development Economic Research (UNU-WIDER).
    5. Johannes Hermanus Kemp, 2019. "The Elasticity of Taxable Income: The Case of South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 87(4), pages 417-449, December.
    Full references (including those not matched with items on IDEAS)

    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. Ada Jansen & Winile Ngobeni & Wynnona Steyn, 2023. "A reform option for pension fund contribution as tax expenditure in South Africa: A microsimulation model approach using tax administrative data," WIDER Working Paper Series wp-2023-139, World Institute for Development Economic Research (UNU-WIDER).
    2. Jiao Li & Duccio Gamannossi degl'Innocenti & Matthew D. Rablen, 2023. "Marketed tax avoidance: an economic analysis," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(3), pages 753-788, July.
    3. European Commission, 2013. "Tax reforms in EU Member States - Tax policy challenges for economic growth and fiscal sustainability – 2013 Report," Taxation Papers 38, Directorate General Taxation and Customs Union, European Commission.
    4. Slemrod, Joel, 1998. "Methodological Issues in Measuring and Interpreting Taxable Income Elasticities," National Tax Journal, National Tax Association, vol. 51(n. 4), pages 773-88, December.
    5. repec:ecr:col037:5367 is not listed on IDEAS
    6. Javorcik, Beata S. & Narciso, Gaia, 2017. "WTO accession and tariff evasion," Journal of Development Economics, Elsevier, vol. 125(C), pages 59-71.
    7. José Félix Sanz Sanz, 2025. "Measuring the effectiveness of statutory tax rates as generators of revenue and progressivity," Working Papers 2025-13, FEDEA.
    8. Marko Ledić & Ivica Rubil, 2026. "How do indirect taxes reshape tax-benefit-revealed social preferences for redistribution?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 53(1), pages 167-199, February.
    9. Neryvia Pillay, "undated". "Taxpayer responsiveness to taxation: Evidence from bunching at kink points of the South African income tax schedule," ERSA Working Paper Series v::y:2021:i::id:75, Economic Research Southern Africa.
    10. Nicole Bosch & Henk-Wim de Boer, 2017. "The Elasticity of Taxable Income for the Self-Employed: Heterogeneity across Reforms and Income Levels," CPB Discussion Paper 354.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    11. Giertz, Seth H., 2007. "The Elasticity of Taxable Income Over the 1980s and 1990s," National Tax Journal, National Tax Association;National Tax Journal, vol. 60(4), pages 743-768, December.
    12. Doerrenberg, Philipp & Peichl, Andreas & Siegloch, Sebastian, 2017. "The elasticity of taxable income in the presence of deduction possibilities," Journal of Public Economics, Elsevier, vol. 151(C), pages 41-55.
    13. Aroop Chatterjee & Léo Czajka & Amory Gethin, 2021. "A Wealth Tax for South Africa," World Inequality Lab Working Papers halshs-03131182, HAL.
    14. YoungRok Kim, 2023. "Effects of tax benefits on the price elasticity of charitable contributions in South Korea," Pacific Economic Review, Wiley Blackwell, vol. 28(2), pages 206-217, May.
    15. Kristoffer Berg & Thor O. Thoresen, 2020. "Problematic response margins in the estimation of the elasticity of taxable income," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(3), pages 721-752, June.
    16. Xavier Dufour-Simard & Pierre-Carl Michaud & Michael Smart, 2025. "Is the elasticity of taxable income mostly an income effect ?," CIRANO Working Papers 2025s-05, CIRANO.
    17. Simeon Schächtele, 2020. "Tax Responses at Low Taxable Incomes: Evidence from Germany," Fiscal Studies, John Wiley & Sons, vol. 41(2), pages 411-439, June.
    18. Martin Besfamille & Pablo Olmos, 2010. "Inspectors or Google Earth? Optimal fiscal policies under uncertain detection of evaders," Department of Economics Working Papers 2010-09, Universidad Torcuato Di Tella.
    19. Wu, T.C. Michael & Yang, C.C., 2014. "Income tax deductions for losses as insurance revisited," Economic Modelling, Elsevier, vol. 41(C), pages 274-280.
    20. Claudio Agostini, 2016. "Small Firms and Presumptive Tax Regimes in Chile: Tax Avoidance and Equity," Working Papers wp_049, Adolfo Ibáñez University, School of Government.
    21. Jacob Goldin & Tatiana Homonoff, 2013. "Smoke Gets in Your Eyes: Cigarette Tax Salience and Regressivity," American Economic Journal: Economic Policy, American Economic Association, vol. 5(1), pages 302-336, February.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    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:unu:wpaper:wp-2025-17. 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: Siméon Rapin (email available below). General contact details of provider: https://edirc.repec.org/data/widerfi.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.