South Africa’s Tax Gaps: Where Is Revenue Being Lost?

How much tax goes unreported under South Africa’s existing rules? And what can tax gap estimates tell us about where to focus efforts to raise revenue? This webinar draws on research from the Southern Africa – Towards Inclusive Economic Development (SA-TIED) programme to explore what value-added tax (VAT) and corporate income tax (CIT) reporting gaps reveal about compliance and revenue mobilisation.

The discussion brings together two studies co-authored by Dr Amina Ebrahim: The VAT gap in South Africa: A bottom-up approach and South Africa corporate tax gap study: A bottom-up approach based on audit assessments. Both use South African tax returns and audit data to estimate underreporting and identify how compliance differs across businesses.

The findings show that compliance risks vary across taxes, firms and sectors, with the VAT study also highlighting regional differences. These patterns can help inform more targeted tax administration. However, understanding what the estimates measure, and what they leave out, matters when assessing how much additional revenue could realistically be collected.

Dr Amina Ebrahim, Research Fellow at UNU-WIDER, will unpack:

• What South Africa’s VAT and CIT gap studies reveal about underreporting;
• Why reporting gaps differ across firms, industries and regions;
• How informality can arise both outside and within the registered tax system;
• What tax gap estimates can and cannot tell us about potential revenue; and
• Which responses could improve compliance, and how to test whether they work.

Join us as we explore what South Africa’s tax gaps mean for tax enforcement, policy and revenue mobilisation.