The impact of tax incentives to stimulate investment in South Africa
Stellenbosch Working Paper Series No. WP19/2013Publication date: 2013
Author(s):
[protected email address] (Department of Economics, Georgia State University)
[protected email address] (Department of Economics, University of Stellenbosch)
The purpose of this paper is, very generally, to provide a framework and potential methodology of analysis of tax incentives in one country — South Africa. As incentives are often specific and targeted, the precise methods needed to analyse the effectiveness of incentives may well differ among types of incentives. However, by positing a framework for evaluation based on basic economic principles, we believe that transparency, accountability and rigorous evaluation of individual incentives or regarding the choice of incentives may be enhanced. A classification of different tax incentives is provided, with reference to their acceptability in the economic literature and with an indication of their occurrence in South Africa. The cost of tax incentives to manufacturing in South Africa is estimated by sector of economic activity, indicating a sizeable drain on the national budget, and a multiplier analysis of current tax incentives is undertaken.
JEL Classification:H2, H25, H3
Keywords:South African tax incentives, Investment incentives, tax policy, tax incentives, tax expenditure
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Monday 21 July 202512:00-13:00
Izak Odendaal: Old Mutual Wealth Chief Investment Strategist
Topic: "Diverging fiscal policies and what it means for markets"
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Dr Neil Rankin: Ceo Of Predictive Insights & Stellenbosch University
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Prof Willem Boshoff: Stellenbosch University
Topic: "Two competing approaches in South African competition policy: merger control and anti-cartel enforcement over the past 30 years"
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4 Jul 2025 One Big Beautiful Bill Act passes as tariff pause deadline loomsThis week brought a flurry of data releases alongside a heavy dose of political drama, both locally and globally. Yesterday’s stronger-than-expected US jobs report was the standout global data release. Domestically, tensions persisted in the DA-ANC relationship. On the international stage, headlines were dominated by the passage of the One Big Beautiful...
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