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The progressivity of personal income tax in South Africa since 1994 and directions for tax reform

Southern African Business Review

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Title The progressivity of personal income tax in South Africa since 1994 and directions for tax reform
 
Creator Steenekamp, TJ
 
Subject personal income tax, tax reform, progressivity, tax burden, marginal tax rates, tax threshold, comprehensive personal income tax, dual income tax
 
Description The imperative to reduce poverty levels in South Africa requires notless but more public expenditure and probably higher tax levels. Thepurpose of this study is, firstly, to examine the impact of personalincome tax reforms since 1994 on the tax structure and its scope tomeet the challenges of rising needs and equity. Secondly, the studyaims to provide a broad outline of personal income tax approachesthat are globally considered as alternative reform options. The studyfinds that in South Africa, direct taxes as a percentage of total taxrevenue increased in importance between 1993/94 and 2010/11. The personal income tax burden for wage earners in South Africa has remained fairly constant since 1995. The personal income tax structure is  progressive, but there was a declining trend in progressivity between 1994 and 2009. Increasing personal income tax rates is constrained by low company tax rates, possible increased efficiency costs and ‘herd behaviour’. The income tax system in South Africa conforms to a semi-comprehensive income tax system. The tax reform option that holds the most promise for developing countries (and South Africa) is the dual income tax system.Key words: personal income tax, tax reform, progressivity, tax burden, marginal taxrates, tax threshold, comprehensive personal income tax, dual income tax
 
Publisher College of Economic and Management Sciences (UNISA)
 
Contributor —
 
Date 2013-02-15
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://www.ajol.info/index.php/sabr/article/view/85455
 
Source Southern African Business Review; Vol 16, No 1 (2012); 39-57
1998-8125
1561-896X
 
Language eng
 
Relation https://www.ajol.info/index.php/sabr/article/view/85455/75387
 
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