An overview of commodity tax reform in Southern Africa

Abstract

Various studies have emphasised the trade and / or revenue implications of free trade. The purpose of this study is to investigate future tax implications of further economic integration. Additional considerations are whether tax competition can become an issue and whether it can be used to the benefit of all SADC members. An integrated approach was done of what is needed in terms of commodity taxation to reach a workable long-term solution. This article analyses experiences in the developing world with reference to lessons learned from developed regions. The first section provides a theoretical background, analysing the meaning of commodity tax. The second section emphasises the importance of fiscal decentralisation in federations and the SADC and the third investigates the character of and changes in commodity taxation that could occur in the future.