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The impact of Taxation on Economic Growth in South Africa

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  • Dladla, Khumbuzile
  • Khobai, Hlalefang

Abstract

This paper investigates the impact of taxation on economic growth in South Africa. Yearly data for South Africa for the period 1981 – 2016 was used to develop the Auto-Regressive Distribution Lag (ARDL) approach. The empirical results confirm that there is a negative relationship between taxes and economic growth in South Africa. The findings of the study include that economic growth, trade and openness, capital and taxes are co-integrated. This paper suggests that fiscal policy is very important to force sustainable economic growth in South Africa

Suggested Citation

  • Dladla, Khumbuzile & Khobai, Hlalefang, 2018. "The impact of Taxation on Economic Growth in South Africa," MPRA Paper 86219, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:86219
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    References listed on IDEAS

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    Cited by:

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    2. Joalane Rosina Tota & Denis Nfor Yuni, 2023. "Tax and International Trade in the SADC Region:A Panel Gravity Model Approach," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 24-44.
    3. Yadawananda Neog & Achal Kumar Gaur, 2020. "Tax structure and economic growth: a study of selected Indian states," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-12, December.
    4. Stoyan Tanchev & Naftaly Mose, 2023. "Fiscal Policy and Economic Growth: Evidence from European Union Countries," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 19-36.
    5. Juan-Pierré BRUWER & Mariaan LOMBARD & Yolandé SMIT & Ankit KATRODIA, 2019. "The Influence of Excise Taxation Levied on Product Sales on the Financial Sustainability of South African Tobacco-and-Alcohol-Selling Small, Medium and Micro Enterprise," Expert Journal of Business and Management, Sprint Investify, vol. 7(1), pages 100-106.
    6. John MacCarthy & Paul Muda & Prince Sunu, 2022. "Tax Revenue and Economic Growth Nexus in Ghana: Co-integration and Granger causality Test," Bulletin of Applied Economics, Risk Market Journals, vol. 9(2), pages 15-35.
    7. Cordelia O. Omodero, 2022. "Assessment of the Impact of Direct Taxes on Public Investment in Agriculture in Nigeria," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 21(1), pages 6-20.
    8. Todorović Jadranka Đurović & Đorđević Marina & Krstić Marko, 2020. "The Impact of Corporate Income Tax on Gross Domestic Product - The Case of the Republic of Serbia," Economic Themes, Sciendo, vol. 58(3), pages 311-326, September.
    9. Atdhetar Gara & Vese Qehaja-Keka & Abdylmenaf Bexheti & Arber Hoti & Driton Qehaja, 2024. "Impact of Fiscal Policy on Economic Growth: Evidence from South East European Countries," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 65-77.
    10. Emile AIFA, 2024. "Taxation and Economic Growth in Benin: Does the Rate “eat†the Base?," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 14(6), pages 1-26.
    11. Anwar Rashed Al Quraan, 2020. "General Sales Tax and Economic Growth in Small Open Developing Countries - Evidence from Jordan," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 16(3), pages 7-15.

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    More about this item

    Keywords

    Taxation; Economic growth; Auto-regression Distribution Lag Model (ARDL); Co-integration; South Africa;
    All these keywords.

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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