The VAT gap in South Africa: A bottom-up approach

Amina Ebrahim, Ada Jansen, Zoleka Jaxa, Winile Ngobeni and Wynnona Steyn

No wp-2026-47, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: Improving domestic tax revenue mobilization through increased tax compliance is imperative when policy reform options are limited. For this purpose, determining tax compliance gaps is important, but it requires detailed information. In South Africa, value-added tax is the second-largest contributor to tax revenues; however, few studies have estimated the difference between actual and potential tax revenues. This paper uses audit and value-added tax return information from the South African Revenue Service to calculate the domestic value-added tax gap.

Keywords: Tax compliance; Value-added tax; Tax revenue; Bottom-up approach; Audits (search for similar items in EconPapers)
Date: 2026
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