Exploring options to deepen and broaden the personal income tax base in South Africa

Type Working Paper - WIDER Working Papers
Title Exploring options to deepen and broaden the personal income tax base in South Africa
Author(s)
Volume 147/2023
Publication (Day/Month/Year) 2023
Page numbers 1-29
URL https://doi.org/10.35188/UNU-WIDER/2023/455-7
Abstract
In this paper we explore options for augmenting South Africa’s personal income tax revenue using two microsimulation models: PITMOD simulates the personal income tax system and is underpinned by a dataset comprising a full extract of anonymized individual-level administrative tax data; and SAMOD simulates personal income tax and social benefits using a nationally representative survey. We explore policy reforms at both the upper and lower ends of the income distribution of tax-registered individuals and assess the impacts on revenue and measures of progressivity. The PITMOD simulations are enhanced by introducing a behavioural element to the model and are complemented by using SAMOD to estimate the impacts of the reforms on the whole population including those who are not tax-registered.

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