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Shifting from deductions to credits: Unpacking the distributional effects of medical expenditure considerations in South Africa

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  • Senia Nhamo
  • Edinah Mudimu

Abstract

The recent National Health Insurance White Paper proposes redirection of medical tax credits revenue towards the financing of the national health insurance. This raises critical questions about the impact on affordability for the poor as well as fundamental legal implications. The 2012 tax reforms which saw the move from deductions to credits were justified on the basis of equitable income redistribution. This paper examines the redistributive effects of the medical tax credit system.

Suggested Citation

  • Senia Nhamo & Edinah Mudimu, 2020. "Shifting from deductions to credits: Unpacking the distributional effects of medical expenditure considerations in South Africa," WIDER Working Paper Series wp-2020-30, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2020-30
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    References listed on IDEAS

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    Cited by:

    1. Agustin Redonda & Christopher Axelson, 2021. "Assessing pension-related tax expenditures in South Africa: Evidence from the 2016 retirement reform," WIDER Working Paper Series wp-2021-54, World Institute for Development Economic Research (UNU-WIDER).
    2. Ada Jansen & Winile Ngobeni & Wynnona Steyn, 2023. "A reform option for pension fund contribution as tax expenditure in South Africa: A microsimulation model approach using tax administrative data," WIDER Working Paper Series wp-2023-139, World Institute for Development Economic Research (UNU-WIDER).

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    Keywords

    Tax credit; Medical expenses; Tax deductions; Distribution; Inequality; Tax progressivity; South Africa;
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