The National Treasury and South African Revenue Service, in partnership with UNU-WIDER, shared the preliminary results of the
Firm Level Analysis project on Thursday, 21 January. The project aims to enhance the use of tax data for policy purposes. The set of data comprises anonymous records, spanning approximately six years, with information on 600 000 companies registered for various taxes. This enormous tax administration record allows insight into firm growth and performance and hence, economic growth. The wide range of the data makes it suitable for assessing how firms with different trading or investment strategies perform over time, and will feed the growing demand for a robust evidence base to inform tax policy formulation and evaluation, as well as fiscal decision-making in South Africa.
“There is growing demand for a robust evidence base for tax policy formulation and evaluation, fiscal decision-making and action in our country. The vision of a ‘developmental state’ includes, inter alia, transforming the state into a ‘capable and development state, able to intervene to correct our historical inequities’, as phrased in the National Development Plan. This implies a state that is able to monitor changes in economic conditions and the tax base, measure the impact of past and current policies on poverty and inequality, and estimate the likely impact of proposed policies, including tax incentives, into the future.” Dr Randall Carolissen, South African Revenue Service
Research papers from this project will all be published as a UNU-WIDER working paper series by March 2016. Further research will be done on employment dynamics, tax incentives, allowances and firm behaviour. These sets of research papers are due to be complete by November 2016. The South African Revenue Service is busy working on a strategy to ensure longer sustainability of the project beyond this pilot, and to facilitate on-going access to the administrative data and the panel dataset that has been created, along with all documentation and coding.