%0 Journal Article
%T The progressivity of personal income tax in South Africa since 1994 and directions for tax reform
%A TJ Steenekamp
%J Southern African Business Review
%D 2012
%I University of South Africa
%X The imperative to reduce poverty levels in South Africa requires not less but more public expenditure and probably higher tax levels. The purpose of this study is, firstly, to examine the impact of personal income tax reforms since 1994 on the tax structure and its scope to meet the challenges of rising needs and equity. Secondly, the study aims to provide a broad outline of personal income tax approaches that are globally considered as alternative reform options. The study finds that in South Africa, direct taxes as a percentage of total tax revenue increased in importance between 1993/94 and 2010/11. The personal income tax burden for wage earners in South Africa has remained fairly constant since 1995. The personal income tax structure is  progressive, but there was a declining trend in progressivity between 1994 and 2009. Increasing personal income tax rates is constrained by low company tax rates, possible increased efficiency costs and ¡®herd behaviour¡¯. The income tax system in South Africa conforms to a semi-comprehensive income tax system. The tax reform option that holds the most promise for developing countries (and South Africa) is the dual income tax system.
%U http://www.ajol.info/index.php/sabr/article/view/85455