SA-TIED policy dialogue – Tax and benefit responses to COVID-19 in South Africa

On 19 April, the SA-TIED programme will host the first in a series of policy dialogues to enhance engagement on pertinent economic and social issues facing Southern Africa. 

This first policy dialogue, as part of the SA-TIED Dialogues – Research into Policy series, will be hosted under the work stream Public revenue mobilization for inclusive development, and will tackle issues surrounding South Africa’s tax and benefit responses to the coronavirus pandemic. 

As phase one of the SA-TIED programme comes to an end, the SA-TIED policy dialogue series will showcase research produced throughout the entirety of the programme, from 2018 to 2021, and fuel policy discussions between academia and South African policy makers.

The pandemic has led to a sharp reduction in tax revenues, even when measured against the declined GDP, also in South Africa. According to the National Treasury, the estimated tax-to-GDP ratio stood at 24.6 per cent in fiscal year 2020/21, while it was 26.3 the previous year. The decline is due to automatic stabilization (the fact that when incomes decline, the tax rate is reduced in a progressive system) and the tax deferral opportunities offered to firms during the coronavirus crisis. At the same time, many social grant amounts were raised and new benefits introduced to help households cope with the shock. 

What were these policies in more detail and how well did they serve their stated goals in terms of providing support to firms and households? How should the tax and benefit system now be reformed to both provide adequate revenues to lower the deficit and provide an equitable distribution of incomes? 

These are some of the main questions that speakers will address during the policy dialogue.  

About the policy dialogue 

The policy dialogue will begin with a synthesis of research findings produced under the work stream Public revenue mobilization for inclusive development given by Jukka Pirttilä, a non-resident researcher at UNU-WIDER and Professor of Public Economics at the University of Helsinki. 

Following the synthesis presentation, speakers will dive into the main questions on tax and benefit responses to the coronavirus pandemic in South Africa. The discussion will be moderated by Mashudu Masutha, media liaison for South Africa’s Minister of Finance. 

Speakers

Christopher Axelson, Chief Director: Economic Tax Analysis at National Treasury of South Africa 

Mamiky Leolo, Senior official at South African Revenue Service (SARS)

Dr Gemma Wright, Research Director at Southern African Social Policy Research Insights (SASPRI)

To access more research produced under the work stream on Public revenue mobilization, click here.