The Impact of Taxes and Transfers on Poverty and Income Distribution in South Africa 2014/15

Maya Goldman, Ingrid Woolard and Jon Jellema

No 106, Commitment to Equity (CEQ) Working Paper Series from Tulane University, Department of Economics

Abstract: This paper applies the Commitment to Equity (CEQ) Assessment Framework to the 2014/15 Living Conditions Survey for South Africa to analyse the progressivity of the main tax and social spending programs and quantify their impact on poverty and inequality. The tax and social spending system is progressive - the burden of taxes falls on the richest in South Africa and social spending results in sizable increases in the incomes of the poor. Reductions in poverty and inequality are the largest achieved in the emerging market countries that have so far been included in the CEQ. The analysis by gender shows that the fiscal system is partially responsive to the additional burden of childcare borne by women through social transfers such as the child support grant and public healthcare and education services, and partially responsive to inequality of access to labour opportunities through the progressive direct taxation system. However, these impressive results are partly due to high levels of pre-fiscal inequality in the country and due to valuing in-kind benefits from free government services in education and health at the average cost of provision – they do not take into account the significant variation in the quality of the services provided.

Keywords: fiscal policy; fiscal incidence; social spending; inequality; poverty; taxes; transfers; education; health; housing; South Africa (search for similar items in EconPapers)
JEL-codes: D31 H22 I38 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2021-01
New Economics Papers: this item is included in nep-dev, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Commitment to Equity, January 2021, pages 1-63

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http://repec.tulane.edu/RePEc/ceq/ceq106.pdf First version, 2021 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:tul:ceqwps:106

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