Tax revenue as an automatic fiscal stabiliser - a South African perspective
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Date
Authors
Swanepoel, A.S.
Schoeman, N.J. (Nicolaas Johannes)
Journal Title
Journal ISSN
Volume Title
Publisher
Faculty of Economic and Management Sciences, University of Pretoria
Abstract
The many practical economic and political difficulties encountered in
discretionary fiscal stabilisation policy highlight the potential benefits of
allowing automatic fiscal stabilisers to operate over the cycle. This article
investigates the relevance of tax revenue as an automatic fiscal stabiliser in the
South African economy by an empirical analysis of its role and impact since the
1970s. The study finds that cyclical changes in tax revenue are relatively small
and provide no significant evidence of automatic stabilisation; however, the
potential of this tool as an effective automatic fiscal stabiliser in South Africa
cannot be overlooked as results show a high correlation between the output gap
and automatic stabiliser estimates. Automatic fiscal stabilisers were employed
symmetrically over the cycle and results showed that automatic fiscal stabilisers
became increasingly important towards the end of the sample period.
Description
Keywords
Taxes, Tax revenue, Gross domestic product (GDP), Fiscal stabilization policies, Fiscal stabilization, Fiscal restraints, Fiscal policies, Empirical analysis, Automatic fiscal stabilisers (AFS), Statistics, Economics, Business
Sustainable Development Goals
Citation
Swanepoel, AS & Schoeman, NJ 2002, 'Tax revenue as an automatic fiscal stabiliser - a South African perspective', South African Journal of Economic and Management Sciences, vol. 5, no. 3, pp. 566-588. [http://www.journals.co.za/ej/ejour_ecoman.html]