Economic Growth and the Structure of Taxes in South Africa: 1960-2002*

Koch, Steven F.; Schoeman, N.J.; Tonder, Jurie J. Van

doi:10.1111/j.1813-6982.2005.00013.x

Cited by 34 publications

(16 citation statements)

References 18 publications

(16 reference statements)

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“…We also find that over the sample period the elasticity of growth to changes in tax structure, that is, tax burden and tax mix has been relatively low except during the ZIMPREST period (1996)(1997)(1998)(1999)(2000). Our findings agree with the current empirical evidence, for example, Koch et al (2005) who find a negative relationship between tax structure and growth in South Africa. We compute the dead weight loss in the economy due to inefficiency and get very alarming results.…”

Section: Resultssupporting

confidence: 79%

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Economic growth and tax structure in Zimbabwe: 1984-2009

Marire¹,

Sunde

2012

IJEPEE

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Abstract:We examine the tax-growth nexus in Zimbabwe using parametric and non-parametric analysis. We use a two-stage estimation procedure that first generates efficiency scores for the country using a Data Envelopment Approach. We use the efficiency scores in the second stage to normalise growth to get a proxy for potential economic growth. Using this potential growth we run a translog model that allows computation of time-varying elasticities of growth to changes in tax policy. The translog model results we got indicate that economic growth is inelastic to tax structure in Zimbabwe. As such, we recommend policies that rely on non-tax stimuli to the economy to buttress growth. We find that the most inefficient years were those punctuated with bad economic governance and droughts.

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Section: Resultssupporting

confidence: 79%

“…Major spikes in growth reflect the vagaries of climate. In 1984In , 1987In , 2002In , 2005In and 2008 there were droughts. The case for the year 2000 coincides with the land reform programme and sanctions imposed on Zimbabwe.…”

Section: Economic Growth and Taxes: A Review Of The Literaturementioning

confidence: 99%

Economic growth and tax structure in Zimbabwe: 1984-2009

Marire¹,

Sunde

2012

IJEPEE

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“…These were found to be negatively affected by economic growth. Koch et al (2005) use a methodology similar to the one employed by Lovell and Branson (2001) to present evidence about tax distortions in South Africa. Using data from 1960 to 2002 and a two-stage modeling technique to control for unobservable business cycle variables, they find that decreased tax burdens are strongly associated with increased economic growth; in addition, contrary to most theoretical research, decreased indirect taxation is strongly correlated with increased economic growth potential.…”

Section: Theoretical Reviewmentioning

confidence: 99%

Tax policy developments, donor inflows and economic growth in Malawi

Chiumia¹,

Simwaka²

2012

J. Econ. Int. Finance

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Government continuously operates with revenues below expenditures and taxation is increasingly becoming a sensitive political and economic tool to be relied upon as an instrument for revenue generation and economic growth. This study seeks to examine the impact of tax policy and donor inflows on economic growth in Malawi from 1970 to 2010 using data envelope analysis (DEA) and transcendental logarithm (Translog). In doing the Translog, the study employed the Engle and Yoo three step estimation process. Data analyzed shows that consumption taxes have on average contributed 60.0% to total tax revenue while income taxes take up 40.0%. Tax burden has ranged from 11.0% in the 1970s to around 16.0% in 2010. Results of the study show that a 1.0% decrease in tax burden can raise economic growth by 0.8% in Malawi while a similar reduction in collection of taxes through expenditure can raise growth by 0.6%. Another finding is that economic growth rises by 0.3% for a 10.0% rise in foreign grants. The study therefore finds that reduction in tax burden is more potent in influencing economic growth than fine tuning the proportion in which income and consumption taxes are collected in Malawi. Furthermore, a complete reversal in donor funding will reduce economic growth by 3.0%.

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“…Some countries increase taxes while others do not alter their policies regarding taxation. Koch et al (2005) found income tax and economic growth has direct relationship in South Africa. Ebimobowei and Ebiringa (2012) investigated the growth of Nigeria during 1970 to 2010.…”

Section: Introductionmentioning

confidence: 99%