Zero-rating food in South Africa:  A computable general equilibrium analysis

Kearney, Marna; Heerden, Jan van

doi:10.4102/sajems.v7i3.1362

Cited by 8 publications

(10 citation statements)

References 4 publications

(6 reference statements)

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“…This result was also found in Devarajan, J.D., Go, Robinson, & Sinko (1997). Besides that, Rege (2002), Kearney (2003) and Go et al (2005) have found that welfare loss occurs mostly in the agriculture sector and zero-rated goods and exempted goods need to be broadened in GST. While Bye, Strøm, & Åvitsland, (2003) have found that the non-uniform tax rate gives welfare loss compared to the uniform tax rate.…”

Section: Literature Reviewsupporting

confidence: 62%

“…In prioritizing the country's revenue to boost national growth, one of the best ways is to increase efficiency in the tax collection system. Tamaoka (1994), Gale & Rohaly (2002), Kearney (2003) and Brendon (2013) have noted that most countries that expand their consumption tax base will experience the trade-off between efficiency and equity based on economic structure and policy respectively.…”

Section: Introductionmentioning

confidence: 99%

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Constructing the Computable General Equilibrium (CGE) To Analyse the Impact of Goods and Services Tax (GST) on Government Revenue and Targeted Household of M40 and B40 in Malaysia

Saidi¹,

Harun²,

Zainol

2019

KOMPARTEMEN

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Computable general equilibrium (CGE) models have been widely used in economic policy analysis in recent years. The selection of the model is based on the CGE model’s ability to see the effects on sectors, household groups, governments, and even able to see the overall economic impact for a time period. In Malaysia, the issues arise from the impact of policies analysed in the CGE modelling framework have been constrained in part by the completion of a Social Accounting Matrix (SAM). The main purpose of this paper is to propose a new Malaysian CGE model framework to analyse the impact of implementation of GST on government revenue and welfare of targeted household groups of B40 and M40 in Malaysia. The CGE model developed in the present paper is based on more recent data in Malaysian SAM (2014). Then the data was modified to suit with Malaysian CGE for GST, namely the MYGST_CGE model. This paper describes the structure of MYGST_CGE, with 33 activities, 33 commodities, 7 types of labour, and 7 categories of household groups were constructed. The CGE utilized in the present study can be applied to answer questions concerning whether GST implementation would have the trade-off between government revenue and the targeted groups by taking into account the elements of GST such as standard-rate, zero-rate and exempted rate. For the purpose of policy analysis, simulation exercises are conducted using the multi-sectoral, multi-factorial and multi-households approach. Based on the proposed framework model review, the instruments used for measurement of effectiveness and welfare were C-efficiency ratio, regressive, progressive, equivalent variation and simulations. The paper will give an opportunity for future research work in a related area.

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Section: Literature Reviewsupporting

confidence: 62%

Section: Introductionmentioning

confidence: 99%

Constructing the Computable General Equilibrium (CGE) To Analyse the Impact of Goods and Services Tax (GST) on Government Revenue and Targeted Household of M40 and B40 in Malaysia

Saidi¹,

Harun²,

Zainol

2019

KOMPARTEMEN

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“…For the history and issues about VAT as a tax instrument, see Baker and Elliott (1997) and Ebill et al (2001) for example. 3 See Kearney (2004). 4 This does not mean that the whole tax system is regressive-see tax structure in section 2.…”

Section: Introductionmentioning

confidence: 99%

An Analysis Of South Africa's Value Added Tax

Kearney

Robinson

et al. 2005

Policy Research Working Papers

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In this paper, we describe South Africa's value added tax (VAT), showing that (1) the VAT is mildly regressive and (2) it is an effective source of government revenue, compared to other tax instruments in South Africa. We evaluate the VAT in the context of other distortions in the economy by computing the marginal cost of funds-the effect of raising government revenue by increasing the VAT rates on household welfare. Then we evaluate alternative, revenue-neutral tax systems in which we reduce the VAT and raise income taxes. For the analysis, we use a computable general equilibrium (CGE) model with detailed specification of South Africa's tax system. Households are disaggregated into income deciles. We demonstrate that alternative tax structures can benefit low-income households without placing excess burdens on high-income households.

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“…The CGE model was calibrated with a SAM for South Africa estimated with entropy procedures using as base the 1988 SAM for South Africa published by the Central Statistical Service (McDonald and Robinson (1998) in McDonald and Kirsten (1999)). Thurlow and Van Seventer (2002) presented a comparative static CGE model for South Africa based on the standard static IFPRI model, which also provided the basis for Kearney's (2003) extension to assess the implications of different value added options. An example of an environmental application is found in De Wet and Van Heerden (2003).…”

Section: Application To South Africamentioning

confidence: 99%

“…Lange et al (2003) discuss environmental accounting principals in a Southern African context. In some of the more recent CGE models the treatment of taxes have been refined (Kearney, 2003), and in models for developing countries home production for home consumption have been included (Thurlow & Wobst, 2003). Work is also underway with regard to global modelling of trade related issues in a multiregion CGE framework (using GAMS software) as opposed to the Purdue Global Trade Analysis Project (GTAP) (using GEMPACK software) framework.…”

Section: Economic Questions Suitable For the Sam/cge Frameworkmentioning

confidence: 99%

General equilibrium modelling in South Africa: What the future holds

McDonald

Punt²

2005

Agrekon

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This paper provides an overview of the main research contributions of the past decade using general equilibrium models to analyse agricultural issues in South Africa. The methodological developments since the change to democracy ten years ago are viewed in the context of developments in this area of research carried out internationally. It will be shown in this paper that the modelling and computing techniques have vastly improved during the past decade, both in an ongoing attempt to refine existing models, and in an attempt to extend the modelling framework to make provision for issues that cannot be sufficiently captured in the standard comparative static models. These extensions include dynamic modelling, global modelling, environmental modelling and micro simulation. The paper highlights the non-trivial data requirements of this type of modelling. The national statistical agency, Statistics South Africa, supports general equilibrium modellers by their development of input-output tables, social accounting matrices and, more recently, supply and use tables. This decade has therefore witnessed an improvement in the data for the construction of national level social accounting matrices. Requirements for provincial level data have however not been met sufficiently, posing huge challenges for provincial and regional modelling. The lack of primary data has however stimulated development of advanced data estimation techniques that can be applied to overcome this data challenge. Application of general equilibrium techniques to analyse agricultural issues in South Africa still remains limited and substantial support and training of researcher is still needed to expand domestic capacity in this field of research.

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Zero-rating food in South Africa: A computable general equilibrium analysis

Cited by 8 publications

References 4 publications

Constructing the Computable General Equilibrium (CGE) To Analyse the Impact of Goods and Services Tax (GST) on Government Revenue and Targeted Household of M40 and B40 in Malaysia

Constructing the Computable General Equilibrium (CGE) To Analyse the Impact of Goods and Services Tax (GST) on Government Revenue and Targeted Household of M40 and B40 in Malaysia

An Analysis Of South Africa's Value Added Tax

General equilibrium modelling in South Africa: What the future holds

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