Presentation sa-tied- public revenue mobilization for inclusive development
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This document outlines work stream 2 of the Southern Africa – Towards Inclusive Economic Growth (SA-TIED) initiative, which focuses on public revenue mobilization for inclusive development. The work stream has two main aims: 1) continuing work with firm-level data to make it more accessible and well-documented, and 2) conducting actual tax research using administrative and survey data. Key activities include hiring someone to prepare panel data sets on firms and individuals, developing secure computing resources and documentation, and commissioning research papers on topics like the impact of taxes on firms and self-employment, compliance, and using field experiments and microsimulation models to study policy reforms. The work will involve capacity building, collaboration with local tax authorities,
Presentation sa-tied- public revenue mobilization for inclusive development
- 1. Southern Africa – Towards Inclusive Economic Growth (SA-TIED) Jukka Pirttilä | 30 November 2017, Pretoria Work stream 2: Public revenue mobilization for inclusive development
- 2. This work stream has two main aims 1. As a continuation to the Firm-Level Analysis project, a key goal is the work on data – Modify SARS data so that it is easily accessible and well documented – As earlier, the data set also serves the needs of other work streams 2. Actual tax research – Using both administrative SARS data but also other data sets (survey data)
- 3. On data • A person will be hired (a PSA contract) to work, based on either at the NT or SARS, for a year • The main task is to prepare panel data sets – On firms paying the CIT – On individuals (based on PAYE or income tax returns?) • Key variables included, alternative variables can be added • Clearly annotated code, documents describing the data and user manuals will be prepared
- 4. Additional remarks on data work • Secure and powerful computing resources needed, with up- to-date software • A separate panel on firms that are not corporations (sole proprietors) will also be useful • VAT data to cross check income tax returns • Can audit data be combined with the firm panel? • A scoping study can be prepared on the issue of arranging secure online access to data
- 5. Why worry about taxes? • Clearly, ministries and revenue authorities want to raise (a lot of) revenue and improve compliance • However, South Africa also needs new jobs and investments – How distortive are taxes? • Clear linkages to inequality analysis – Taxes and transfers are the most direct way to influence distribution – How large are the trade offs?
- 6. Research topics • Responsiveness of firms to tax incentives – The impact of taxation on the self employed, taxed according to the progressive income tax schedule – The effects of incentives such as the special HQC regime on larger firms • Microsimulation model for enterprise taxation – Combined business taxation and owners’ taxes – Can be used to predict taxpayer responses to changes in the overall burden of the tax under the assumption that firm owners minimise their taxes
- 7. Research topics continued • Compliance – Profiling models of under-reporting or non-reporting – If audit data can be used, the impact of different types of enforcement mechanisms on revenues can be evaluated – Do firms avoid being handled by the Large business centre? • 2015 reform? • Field experiments – Often used to encourage compliance – Perhaps more novelty would be in work related to improving employment or growth – If used, what is experimented must be chosen so that it caters for SARS needs
- 8. Research based on survey data • Tax-benefit microsim model, SAMOD, will be kept up to date – Possibility to merge with admin data explored – Used to study work incentives (PTRs, EMTRs) – And the impact of policy reforms on work incentives, as well as inequality • A scoping study on a micro-macro model • Revisiting the ETI – Possibility to use a triple differences strategy?
- 9. Capacity building • Data work one area of capacity building • Research conducted jointly with SARS and NT staff members in case they have the time • Participation of SA academic researchers, especially early-career researchers, very welcome – Linking foreign and SA scholars • Collaboration with other tax authorities in the region encouraged – E.g. via ATAF
- 10. Timing Year 1 • Data work starts, to be finished by the end of 2018 • First research papers commissioned • Call for papers organised towards the end of the year / early on during Year 2 (jointly with other streams?) All years: annual workshops Year 3 • Papers ready • Final seminar Year 2 • Second batch of work commissioned • Online data access considered
- 11. Some final remarks • Follow up of ongoing policy changes – Important for researchers to be well informed about current or future reforms • Data access for researchers not based in Gauteng area a challenge – Can we have people who can run the code on behalf of researchers based elsewhere? – Is it possible to have small samples that could be used for writing the code?