Poverty issues for zero rating value-added tax (VAT) in South Africa

Type Working Paper - Departmental Working Paper
Title Poverty issues for zero rating value-added tax (VAT) in South Africa
Author(s)
Volume 1
Issue 19336
Publication (Day/Month/Year) 1999
URL http://documents.worldbank.org/curated/en/912781468777030753/Poverty-issues-for-zero-rating-value-ad​ded-tax-VAT-in-South-Africa
Abstract
This study confirms the logic of value-added tax (VAT) exemptions for maize. Based on tax efficiency and equity, this commodity dominates all alternatives: it is well targeted and has a measurable positive impact on caloric consumption by deficit households. Other value-added tax exemptions being considered have less to recommend them. In particular, an exemption for meat is not justified, either for equity or nutritional reasons, as it would favor non-poor urban households and negatively affect the caloric consumption of rural households.

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