Are the South African fiscal authorities serious about tax base broadening?

Developing countries are often advised to broaden their tax base. The South African fiscal authorities have at various times claimed to do so, inter alia in order to reduce tax rates. The paper explores whether they have been serious about base broadening. Various conceptual issues are raised in defining base broadening and base erosion. Drawing on budget documentation, tax measures of base broadening and erosion from 1994 to 2018 were tabulated. A selection of the most salient nonquantified measures and all quantified measures are presented. Net budgeted base broadening (2018 prices) of R1.7 billion is reported, in the process of which various tax increases and decreases were also implemented. The need for a much more systematic quantification of all base-broadening and base-erosion tax measures in South Africa is indicated. This should not only occur at the time of announcement but especially to track and report the actual outcome of all such measures in subsequent years.

H20, H21, H26

Tax base broadening, Tax efficiency, Tax base erosion, Tax evasion and avoidance, Tax measures, South African fiscal authorities