Economic Growth Effects of Fiscal Policy in South Africa: Empirical Evidence from Personal Income Tax

International Journal of Economics and Financial Issues Pub Date : 2024-05-14 DOI:10.32479/ijefi.15795

Lavisa Tala

{"title":"Economic Growth Effects of Fiscal Policy in South Africa: Empirical Evidence from Personal Income Tax","authors":"Lavisa Tala","doi":"10.32479/ijefi.15795","DOIUrl":null,"url":null,"abstract":"This study determined economic growth effects of fiscal policy in South Africa. Particular attention was paid to effects of personal income tax on economic growth for the period 1993Q3 -2022Q4. The influence of personal income tax on economic growth was analysed using non-linear autoregressive distributed lag (NARDL) bounds test for cointegration. Estimated results indicated rise in personal income tax is growth-friendly in the short-run. While, in the long –run growth is affected by both positive and negative shocks in personal income tax. Positive personal income tax changes are detrimental to economic growth in the long run. Increasing personal income tax will compromise the country’s economic growth strategy. Furthermore, positive changes in personal income tax affect economic growth more than negative shocks as confirmed by dynamic multiplier graph. Dynamic multiplier graph further reveal existence of asymmetry. Additionally, Wald test value of -6.2775 validated asymmetric effect of personal income tax on economic growth. It is therefore, recommended that policy makers should focus on considering other sources of tax revenue. The current structure of the tax system is skewed towards personal income tax. Policy makers should keep the current ratio of personal income tax and widen tax base to realise inclusive economic growth.","PeriodicalId":30329,"journal":{"name":"International Journal of Economics and Financial Issues","volume":"112 23","pages":""},"PeriodicalIF":0.0000,"publicationDate":"2024-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Economics and Financial Issues","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.32479/ijefi.15795","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}

引用次数: 0

Abstract

This study determined economic growth effects of fiscal policy in South Africa. Particular attention was paid to effects of personal income tax on economic growth for the period 1993Q3 -2022Q4. The influence of personal income tax on economic growth was analysed using non-linear autoregressive distributed lag (NARDL) bounds test for cointegration. Estimated results indicated rise in personal income tax is growth-friendly in the short-run. While, in the long –run growth is affected by both positive and negative shocks in personal income tax. Positive personal income tax changes are detrimental to economic growth in the long run. Increasing personal income tax will compromise the country’s economic growth strategy. Furthermore, positive changes in personal income tax affect economic growth more than negative shocks as confirmed by dynamic multiplier graph. Dynamic multiplier graph further reveal existence of asymmetry. Additionally, Wald test value of -6.2775 validated asymmetric effect of personal income tax on economic growth. It is therefore, recommended that policy makers should focus on considering other sources of tax revenue. The current structure of the tax system is skewed towards personal income tax. Policy makers should keep the current ratio of personal income tax and widen tax base to realise inclusive economic growth.

查看原文本刊更多论文

南非财政政策对经济增长的影响：来自个人所得税的经验证据

本研究确定了南非财政政策对经济增长的影响。特别关注了 1993Q3 - 2022Q4 期间个人所得税对经济增长的影响。使用非线性自回归分布滞后（NARDL）协整边界检验分析了个人所得税对经济增长的影响。估计结果表明，个人所得税的增加在短期内有利于经济增长。而从长期来看，增长会受到个人所得税正负冲击的影响。从长期来看，个人所得税的正向变化不利于经济增长。增加个人所得税会损害国家的经济增长战略。此外，个人所得税的正向变化比负向冲击对经济增长的影响更大，动态乘数图也证实了这一点。动态乘数图进一步揭示了非对称性的存在。此外，Wald 检验值 -6.2775 验证了个人所得税对经济增长的非对称影响。因此，建议政策制定者重点考虑其他税收来源。目前的税制结构偏重于个人所得税。政策制定者应保持目前的个人所得税比例，并扩大税基，以实现包容性经济增长。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

International Journal of Economics and Financial Issues

自引率

0.00%

发文量

期刊介绍： International Journal of Economics and Financial Issues (IJEFI) is the international academic journal, and is a double-blind, peer-reviewed academic journal publishing high quality conceptual and measure development articles in the areas of economics, finance and related disciplines. The journal has a worldwide audience. The journal''s goal is to stimulate the development of economics, finance and related disciplines theory worldwide by publishing interesting articles in a highly readable format. The journal is published Bimonthly (6 issues per year) and covers a wide variety of topics including (but not limited to): Macroeconomcis International Economics Econometrics Business Economics Growth and Development Regional Economics Tourism Economics International Trade Finance International Finance Macroeconomic Aspects of Finance General Financial Markets Financial Institutions Behavioral Finance Public Finance Asset Pricing Financial Management Options and Futures Taxation, Subsidies and Revenue Corporate Finance and Governance Money and Banking Markets and Institutions of Emerging Markets Public Economics and Public Policy Financial Economics Applied Financial Econometrics Financial Risk Analysis Risk Management Portfolio Management Financial Econometrics.