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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Poverty Issues for Zero Rating VAT in South Africa
Authors:Alderman, HaroldISNI
Ninno, Carlo delISNI
Year:1999
Periodical:Journal of African Economies
Volume:8
Issue:2
Period:July
Pages:182-208
Language:English
Geographic term:South Africa
Subjects:value added tax
poverty
food
Economics and Trade
External link:https://jae.oxfordjournals.org/content/8/2/182.full.pdf
Abstract:Governments often include equity considerations when determining rates for value added taxes (VAT). This paper explores the implication of current and proposed tax exemptions in South Africa from the perspective of their impacts on the expenditures of the poor and on the calorie and protein consumption of low-income households. Maize, which is currently exempted from VAT, is shown to be the best choice for low tax rates from both the standpoints of equity and the impact on the food consumption of the poor. In contrast, lower tax rates on fluid milk, which is currently exempted from VAT, and meat, for which an exemption has been proposed, are not good vehicles for assisting the poor. The paper illustrates the revenue forgone with zero tax rates on these commodities and compares the tax relief for the poor and change in nutrients consumed from alternative tax exemptions. The study is based on findings from the 1993 Living Standards and Development Survey. App., bibliogr., notes, ref., sum.
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