The Kingdom of Eswatini has been rated as the sixth country with the highest Gini coefficient. Gini coefficient refers to the ratio between the income shares held by the richest 10 per cent to the income held by the poorest 10 per cent in the national income distribution. The report revealed that of the 10 countries with the highest income inequality, six were found in Southern Africa.
Ferdie Schneider, National Head: Tax, BDO South Africa Since the outset of the new democracy, South Africa used its tax resources to expand social assistance and increase spending on education and health services thereby reducing poverty.
Achieving greater income equality has however, remained a challenge.
Household consumption inequality, measured by the Gini coefficient, increased from 0. This potentially ranks South Africa as one of the most unequal countries amongst middle-income countries. Fiscal Policy and Redistribution in an Unequal Society.
And, ii what is the impact of taxes and spending on the rates of poverty and inequality in South Africa? The analysis concludes that South Africa is managing a sizeable reduction in poverty and inequality through its fiscal instruments compared to certain other countries.
The Update seeks to measure the impact of fiscal policy on inequality and poverty in South Africa compared to 12 middle-income countries. The Update finds that the South African tax system is slightly progressive, whilst spending is highly progressive. In other words, taxes in South Africa are born by the rich, and the tax resources are redirected to the poor.
A tax is progressive if the cumulative share of a tax paid by the bottom income earners of the population is lower than its share in income.
A transfer or spending program is progressive if the cumulative share of the total spending on the transfer received by the bottom income earners of the population is higher than its share of market income.
The South African fiscal policy applies a mix of progressive direct taxes and slightly regressive indirect taxes which, if combined, results in a slightly progressive tax system. Direct taxes, including personal income and payroll taxes are progressive, as the rich pay a proportionally higher share of total direct tax compared to their share of income.
As these taxes comprise a relatively high share of GDP, they decrease the income gap between the rich and the poor. Although direct taxes in South Africa are progressive they are less so than in other countries. Indirect taxes are slightly regressive. The study concludes that the regressivity at the lower income levels largely reflects the impact of excises, as value-added and fuel taxes are progressive.
In Brazil and Mexico the overall burden of indirect taxation rises more progressively with income than in South Africa.
South African fiscal policy achieves the largest reductions in poverty and inequality of the 12 countries studied. The South African fiscal system, elevates 3.1 EMPLOYMENT AND INEQUALITY OUTCOMES IN SOUTH AFRICA Murray Leibbrandt, Ingrid Woolard, Hayley McEwen and Charlotte Koep Southern Africa Labour and Development Research Unit (SALDRU) and.
I declare that POVERTY REDUCTION STRATEGIES IN SOUTH AFRICA is my income/wealth inequality, low job generation rate by SMME’s, high HIV/AIDS infection rate, public corruption and inadequate monitoring of poverty. Therefore, if meaningful South Africa’s Poverty Reduction .
Opinion - For everybody of my generation, from around the world, South Africa and Nelson Mandela, of course, has a universal meaning.
I was born in and when I was a teenager, South Africa was. A successful strategy of poverty reduction must have at its core measures to promote policy mirrored elsewhere in South Asia and Africa. Initial levels of income inequality are important in determining how powerful an effect growth has in reducing poverty.
For example, it . Economic inequality, sometimes referred to as income inequality, is the unequal distribution of a country’s wealth.
In highly unequal societies, such as South Africa, most people live in poverty while a minority amasses enormous wealth. Accelerating poverty and inequality reduction will require a combination of policies that promote inclusive growth through boosting access to education and skilled jobs creation, according to a recently released report produced jointly by the World Bank, South Africa Department of Planning.