Revenue implications of trade liberalization in South Africa

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Periodical article

Title:	Revenue implications of trade liberalization in South Africa
Authors:	Matlanyane, Adelaide Harmse, C.
Year:	2002
Periodical:	South African Journal of Economics
Volume:	70
Issue:	2
Pages:	334-346
Language:	English
Geographic term:	South Africa
Subjects:	public revenue economic law
External link:	https://onlinelibrary.wiley.com/doi/10.1111/j.1813-6982.2002.tb01294.x/pdf
Abstract:	By conducting an econometric analysis of the determinants of trade tax revenue, this paper sets out to discover the effect of trade reform on government revenue. The analysis leads to the conclusion that trade liberalization in South Africa has not led to a significant reduction in trade tax revenue, at least not in the short run. Given the significant negative effect of import-GDP ratio on customs revenue, the government must take steps to couple liberalization policies with other macroeconomic policies. If this were done with something like exchange rate liberalization, this would help to mitigate budgetary pressures. Therefore, a sound macroeconomic policy environment can considerably help to foster successful trade liberalization. Taking advantage of the depreciation of the rand by increasing export earnings could ensure enough earnings from exports to offset the loss of revenue from trade taxes because of lower rates. Bibliogr. [AFC Leiden abstract]