Research & Evidence Base

A partnership between the Development Bank of Southern Africa (DBSA), National Treasury’s (NT) SA TIED research projects, the National Planning Commission (NPC), and the Presidential Climate Commission (PCC) was formed to assess what level of investment is required between now and 2030 to achieve the Sustainable Development Goals (SDGs) related to access to adequate water and sanitation as well as the water sector objectives of the National Development Plan 2030 (NDP), and ensure these service levels are met up to 2050. This work will also feed into the broader SA-TIED workstream related to Water-Energy-Food (WEF) in the context of Climate Change (WEF CC) with a particular focus on the WEF nexus. The study does not yet deal with WEF nexus issues but forms part of the groundwork for future work to come on this topic.

While anecdotal evidence suggests widespread corporate tax evasion, systematic empirical data remain scarce. In this paper, we estimate the corporate income tax gap, the discrepancy between reported liabilities and true underlying tax obligations, for the entire population of small, medium, and large incorporated businesses in South Africa. Our analysis employs a bottom-up approach, leveraging a rich dataset of tax returns and the universe of taxpayer audits to quantify detectable non-compliance. By applying a random forest machine learning model to the microdata, we analyse the structure of evasion and estimate an underreporting gap of 13% across small, medium, and large firms. Our findings also reveal that the tax gap differs markedly across firms of different sizes and industries. Multinational firms exhibit systematically smaller tax gaps than national firms, whereas businesses in special economic zones exhibit systematically larger tax gaps than other firms

Effective mobilization of revenue from tobacco requires a clear understanding of market dynamics and their evolution under excise taxation. This study provides a descriptive analysis of the South African tobacco industry using administrative tax data. We examine firm and market characteristics, including government revenue from cigarette excise taxes, market concentration, financial outcomes, and employment trends. In addition, we employ a dynamic panel model to describe the relationship between excise taxation and outcomes for tobacco firms. Our trend analysis findings highlight a notable structural shift in the market since 2015. Regression results indicate that while higher excise taxes are associated with lower gross sales, they show no meaningful associations with changes in the financial performance of firms. By utilizing administrative data, this study lays the groundwork for future research on excise-taxed industries, offering insights to guide evidence-based policy decisions.

Rising xenophobia is fuelled by narratives that woefully and wilfully misrepresent SA’s socio-economic problems and immigration and refugee law.