An Analysis of South Africa's Value Added Tax

In this paper, the authors describe South Africa's value added tax (VAT), showing that (1) the VAT is mildly regressive, and (2) it is an effective source of government revenue, compared with other tax instruments in South Africa. They evaluate the VAT in the context of other distortions in the...

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Main Authors:	Go, Delfin S., Kearney, Marna, Robinson, Sherman, Thierfelder, Karen
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACCOUNTING ADMINISTRATIVE COSTS AGRICULTURE BASE YEAR CAPITAL FORMATION COAL COMMODITY TAXES COMPLIANCE COSTS CONSUMER PRICE INDEX CONSUMERS CONSUMPTION EXPENDITURES CONSUMPTION TAXES CORPORATE TAXES DISTORTIONARY TAXES DISTRIBUTION OF INCOME ECONOMIC WELFARE ECONOMISTS ELASTICITIES ELASTICITY ELASTICITY OF SUPPLY ELECTRICITY EQUILIBRIUM EQUILIBRIUM MODELS EQUIVALENT VARIATION EXCHANGE RATE EXCISE TAXES EXPORTS FINANCIAL SECTOR FINANCIAL SERVICES FISCAL REFORM FISHERIES FISHING FORESTRY FUELS GENERAL EQUILIBRIUM ANALYSIS GENERAL EQUILIBRIUM MODEL GOVERNMENT SPENDING IMPORTS INCOME INCOME DISTRIBUTION INCOME TAXES INPUT USE INTERMEDIATE GOODS INTERMEDIATE INPUTS LEISURE LEVIES MACROECONOMIC CONDITIONS MACROECONOMICS MARGINAL COST MARGINAL PROPENSITY TO SAVE MARGINAL WELFARE COSTS MARKET CLEARING PRICES METALS OIL PAYROLL TAXES POLICY ENVIRONMENT PRICE CHANGES PRODUCERS PUBLIC ECONOMICS PUBLIC EXPENDITURE PUBLIC FINANCE PUBLIC FUNDS PUBLIC GOODS PURCHASING POWER REAL WAGES RETAIL SALES TAX SALES TAXES SAVINGS SOCIAL SERVICES STRUCTURAL CHANGE TAX TAX COLLECTION TAX RATES TAX REFORMS TAX REVENUE TAX SYSTEMS TECHNICAL ASSISTANCE TOTAL OUTPUT TOTAL REVENUE TRADE BALANCE TRADE LIBERALIZATION TRANSPORT TREASURY UNEMPLOYMENT UTILITIES VALUE ADDED VALUE ADDED TAXES WAGES WATER SUPPLY WELFARE ECONOMICS WELFARE EFFECTS
Online Access:	http://documents.worldbank.org/curated/en/2005/08/6090138/analysis-south-africas-value-added-tax http://hdl.handle.net/10986/8630

id	okr-10986-8630
recordtype	oai_dc
spelling	okr-10986-86302021-04-23T14:02:43Z An Analysis of South Africa's Value Added Tax Go, Delfin S. Kearney, Marna Robinson, Sherman Thierfelder, Karen ACCOUNTING ADMINISTRATIVE COSTS AGRICULTURE BASE YEAR CAPITAL FORMATION COAL COMMODITY TAXES COMPLIANCE COSTS CONSUMER PRICE INDEX CONSUMERS CONSUMPTION EXPENDITURES CONSUMPTION TAXES CORPORATE TAXES DISTORTIONARY TAXES DISTRIBUTION OF INCOME ECONOMIC WELFARE ECONOMISTS ELASTICITIES ELASTICITY ELASTICITY OF SUPPLY ELECTRICITY EQUILIBRIUM EQUILIBRIUM MODELS EQUIVALENT VARIATION EXCHANGE RATE EXCISE TAXES EXPORTS FINANCIAL SECTOR FINANCIAL SERVICES FISCAL REFORM FISHERIES FISHING FORESTRY FUELS GENERAL EQUILIBRIUM ANALYSIS GENERAL EQUILIBRIUM MODEL GOVERNMENT SPENDING IMPORTS INCOME INCOME DISTRIBUTION INCOME TAXES INPUT USE INTERMEDIATE GOODS INTERMEDIATE INPUTS LEISURE LEVIES MACROECONOMIC CONDITIONS MACROECONOMICS MARGINAL COST MARGINAL PROPENSITY TO SAVE MARGINAL WELFARE COSTS MARKET CLEARING PRICES METALS OIL PAYROLL TAXES POLICY ENVIRONMENT PRICE CHANGES PRODUCERS PUBLIC ECONOMICS PUBLIC EXPENDITURE PUBLIC FINANCE PUBLIC FUNDS PUBLIC GOODS PURCHASING POWER REAL WAGES RETAIL SALES TAX SALES TAXES SAVINGS SOCIAL SERVICES STRUCTURAL CHANGE TAX TAX COLLECTION TAX RATES TAX REFORMS TAX REVENUE TAX SYSTEMS TECHNICAL ASSISTANCE TOTAL OUTPUT TOTAL REVENUE TRADE BALANCE TRADE LIBERALIZATION TRANSPORT TREASURY UNEMPLOYMENT UTILITIES VALUE ADDED VALUE ADDED TAXES WAGES WATER SUPPLY WELFARE ECONOMICS WELFARE EFFECTS In this paper, the authors describe South Africa's value added tax (VAT), showing that (1) the VAT is mildly regressive, and (2) it is an effective source of government revenue, compared with other tax instruments in South Africa. They evaluate the VAT in the context of other distortions in the economy by computing the marginal cost of funds-the effect of raising government revenue by increasing the VAT rates on household welfare. Then they evaluate alternative, revenue-neutral tax systems in which they reduce the VAT and raise income taxes. For the analysis, the authors use a computable general equilibrium (CGE) model with detailed specification of South Africa's tax system. Households are disaggregated into income deciles. They demonstrate that alternative tax structures can benefit low-income households without placing excess burdens on high-income households. 2012-06-21T14:47:29Z 2012-06-21T14:47:29Z 2005-08 http://documents.worldbank.org/curated/en/2005/08/6090138/analysis-south-africas-value-added-tax http://hdl.handle.net/10986/8630 English Policy Research Working Paper; No. 3671 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Africa South Africa
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ACCOUNTING ADMINISTRATIVE COSTS AGRICULTURE BASE YEAR CAPITAL FORMATION COAL COMMODITY TAXES COMPLIANCE COSTS CONSUMER PRICE INDEX CONSUMERS CONSUMPTION EXPENDITURES CONSUMPTION TAXES CORPORATE TAXES DISTORTIONARY TAXES DISTRIBUTION OF INCOME ECONOMIC WELFARE ECONOMISTS ELASTICITIES ELASTICITY ELASTICITY OF SUPPLY ELECTRICITY EQUILIBRIUM EQUILIBRIUM MODELS EQUIVALENT VARIATION EXCHANGE RATE EXCISE TAXES EXPORTS FINANCIAL SECTOR FINANCIAL SERVICES FISCAL REFORM FISHERIES FISHING FORESTRY FUELS GENERAL EQUILIBRIUM ANALYSIS GENERAL EQUILIBRIUM MODEL GOVERNMENT SPENDING IMPORTS INCOME INCOME DISTRIBUTION INCOME TAXES INPUT USE INTERMEDIATE GOODS INTERMEDIATE INPUTS LEISURE LEVIES MACROECONOMIC CONDITIONS MACROECONOMICS MARGINAL COST MARGINAL PROPENSITY TO SAVE MARGINAL WELFARE COSTS MARKET CLEARING PRICES METALS OIL PAYROLL TAXES POLICY ENVIRONMENT PRICE CHANGES PRODUCERS PUBLIC ECONOMICS PUBLIC EXPENDITURE PUBLIC FINANCE PUBLIC FUNDS PUBLIC GOODS PURCHASING POWER REAL WAGES RETAIL SALES TAX SALES TAXES SAVINGS SOCIAL SERVICES STRUCTURAL CHANGE TAX TAX COLLECTION TAX RATES TAX REFORMS TAX REVENUE TAX SYSTEMS TECHNICAL ASSISTANCE TOTAL OUTPUT TOTAL REVENUE TRADE BALANCE TRADE LIBERALIZATION TRANSPORT TREASURY UNEMPLOYMENT UTILITIES VALUE ADDED VALUE ADDED TAXES WAGES WATER SUPPLY WELFARE ECONOMICS WELFARE EFFECTS
spellingShingle	ACCOUNTING ADMINISTRATIVE COSTS AGRICULTURE BASE YEAR CAPITAL FORMATION COAL COMMODITY TAXES COMPLIANCE COSTS CONSUMER PRICE INDEX CONSUMERS CONSUMPTION EXPENDITURES CONSUMPTION TAXES CORPORATE TAXES DISTORTIONARY TAXES DISTRIBUTION OF INCOME ECONOMIC WELFARE ECONOMISTS ELASTICITIES ELASTICITY ELASTICITY OF SUPPLY ELECTRICITY EQUILIBRIUM EQUILIBRIUM MODELS EQUIVALENT VARIATION EXCHANGE RATE EXCISE TAXES EXPORTS FINANCIAL SECTOR FINANCIAL SERVICES FISCAL REFORM FISHERIES FISHING FORESTRY FUELS GENERAL EQUILIBRIUM ANALYSIS GENERAL EQUILIBRIUM MODEL GOVERNMENT SPENDING IMPORTS INCOME INCOME DISTRIBUTION INCOME TAXES INPUT USE INTERMEDIATE GOODS INTERMEDIATE INPUTS LEISURE LEVIES MACROECONOMIC CONDITIONS MACROECONOMICS MARGINAL COST MARGINAL PROPENSITY TO SAVE MARGINAL WELFARE COSTS MARKET CLEARING PRICES METALS OIL PAYROLL TAXES POLICY ENVIRONMENT PRICE CHANGES PRODUCERS PUBLIC ECONOMICS PUBLIC EXPENDITURE PUBLIC FINANCE PUBLIC FUNDS PUBLIC GOODS PURCHASING POWER REAL WAGES RETAIL SALES TAX SALES TAXES SAVINGS SOCIAL SERVICES STRUCTURAL CHANGE TAX TAX COLLECTION TAX RATES TAX REFORMS TAX REVENUE TAX SYSTEMS TECHNICAL ASSISTANCE TOTAL OUTPUT TOTAL REVENUE TRADE BALANCE TRADE LIBERALIZATION TRANSPORT TREASURY UNEMPLOYMENT UTILITIES VALUE ADDED VALUE ADDED TAXES WAGES WATER SUPPLY WELFARE ECONOMICS WELFARE EFFECTS Go, Delfin S. Kearney, Marna Robinson, Sherman Thierfelder, Karen An Analysis of South Africa's Value Added Tax
geographic_facet	Africa South Africa
relation	Policy Research Working Paper; No. 3671
description	In this paper, the authors describe South Africa's value added tax (VAT), showing that (1) the VAT is mildly regressive, and (2) it is an effective source of government revenue, compared with other tax instruments in South Africa. They evaluate the VAT in the context of other distortions in the economy by computing the marginal cost of funds-the effect of raising government revenue by increasing the VAT rates on household welfare. Then they evaluate alternative, revenue-neutral tax systems in which they reduce the VAT and raise income taxes. For the analysis, the authors use a computable general equilibrium (CGE) model with detailed specification of South Africa's tax system. Households are disaggregated into income deciles. They demonstrate that alternative tax structures can benefit low-income households without placing excess burdens on high-income households.
format	Publications & Research :: Policy Research Working Paper
author	Go, Delfin S. Kearney, Marna Robinson, Sherman Thierfelder, Karen
author_facet	Go, Delfin S. Kearney, Marna Robinson, Sherman Thierfelder, Karen
author_sort	Go, Delfin S.
title	An Analysis of South Africa's Value Added Tax
title_short	An Analysis of South Africa's Value Added Tax
title_full	An Analysis of South Africa's Value Added Tax
title_fullStr	An Analysis of South Africa's Value Added Tax
title_full_unstemmed	An Analysis of South Africa's Value Added Tax
title_sort	analysis of south africa's value added tax
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2005/08/6090138/analysis-south-africas-value-added-tax http://hdl.handle.net/10986/8630
_version_	1764407668727873536

An Analysis of South Africa's Value Added Tax

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