Poverty Issues for Zero Rating VAT in South Africa

Harold Alderman and Carlo del Ninno

Journal of African Economies, 1999, vol. 8, issue 2, 182-208

Abstract: Governments often include equity considerations when determining rates for value added taxes (VAT). This paper explores the implication of current and proposed tax exemptions in South Africa from the perspective of their impact on the expenditures of the poor and on the calorie and protein consumption of low-income households. Maize, which is currently exempted from VAT, is shown to be the best choice for low tax rates from both the standpoints of equity and the impact on the food consumption of the poor. In contrast, lower tax rates on fluid milk, which is currently exempted from VAT, and meat, for which an exemption has been proposed, are not good vehicles for assisting the poor. The paper illustrates the revenue foregone with zero tax rates on these commodities and compares the tax relief for the poor and change in nutrients consumed from alternative tax exemptions. Copyright 1999 by Oxford University Press.

Date: 1999
References: Add references at CitEc
Citations: View citations in EconPapers (16)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:jafrec:v:8:y:1999:i:2:p:182-208

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Journal of African Economies is currently edited by Francis Teal

More articles in Journal of African Economies from Centre for the Study of African Economies Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().