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A reform option for pension fund contribution as tax expenditure in South Africa: A microsimulation model approach using tax administrative data

Ada Jansen, Winile Ngobeni and Wynnona Steyn

No wp-2023-139, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: South Africa has a progressive broad-based personal income tax system with relatively few tax expenditures. The two most important are the medical contribution plus additional tax credits for medical expenses, and the deductions allowed for retirement contributions. A pertinent question for tax reform in South Africa is whether redistributive gains can be achieved by restructuring expenditures in the personal income tax system. This paper considers the redistributive implications of converting the tax deduction for retirement contributions to a tax credit.

Keywords: Pensions; Tax expenditures; Microsimulation; Tax credit (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-afr, nep-age, nep-cmp, nep-pbe and nep-pub
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