The analysis of revenue productivity of the tax system in South Africa applying the Buoyancy and Elasticity measures

South Africa, like other developing nations, has faced challenges in revenue generation over the years, exacerbated by the COVID-19 pandemic, resulting in fiscal deficits and increased government debt. Evaluating tax productivity and system effectiveness gains importance in identifying revenue sources, areas for improvement, and ensuring fiscal stability. This paper focuses on buoyancy and elasticity measures to assess tax system responsiveness to economic shifts and policy changes. Utilising data from 1982 to 2022 and employing ECM-ARDL estimation techniques, the study analyses short-term and long-term buoyancy and elasticity. Findings reveal insights into the tax system’s revenue generation potential, highlighting its role as an automatic stabiliser. Notably, both short-term and long-term elasticities exceed buoyancy measures.

Grantor dc:publisher.institution

University of the Western Cape

Year dc:date.issued

2023

Authors dc:creator

• Bokwana, Esethu
• Foders, Federico

• Buoyancy
• Elasticity
• Discretionary tax measures
• Tax productivity
• Automatic stabiliser

Licence

• https://uwcscholar.uwc.ac.za/bitstreams/f9cd2e7b-0c03-4bb5-90af-6daecd5b734b/download