The impact of a fuel levy on economic growth in South Africa
Government expenditure is one of the factors that could influence economic growth and it depends on borrowing or on the amount of tax revenue. A fuel levy, as an excise tax charged on petroleum products such as petrol, diesel and biodiesel, can be an important source of revenue for the government. I...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
University of Cape Town
2018-03-01
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| Series: | Journal of Energy in Southern Africa |
| Subjects: | |
| Online Access: | https://journals.assaf.org.za/jesa/article/view/2775 |
| _version_ | 1818939551385649152 |
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| author | Thobeka Ncanywa Nosipho Mgwangqa |
| author_facet | Thobeka Ncanywa Nosipho Mgwangqa |
| author_sort | Thobeka Ncanywa |
| collection | DOAJ |
| description | Government expenditure is one of the factors that could influence economic growth and it depends on borrowing or on the amount of tax revenue. A fuel levy, as an excise tax charged on petroleum products such as petrol, diesel and biodiesel, can be an important source of revenue for the government. It can, however, be a burden on fuel consumers. The present study, as an effort to address this controversy, used the vector autoregressive approach to examine the impact of fuel levies on economic growth in South Africa. The results showed a long-run unidirectional negative relationship between economic growth and fuel levy. The conclusion was that the economy needs to grow at a higher rate so as to boost tax revenues and public expenditure. Strong revenue collection, therefore, depends on highly increasing economic growth and efficient tax administration. The implication of a growth-oriented tax system is to minimise distortions created by the tax system and create incentives for drivers of economic growth. |
| first_indexed | 2024-12-20T06:25:33Z |
| format | Article |
| id | doaj.art-19643780469b4469824a004a05f2942e |
| institution | Directory Open Access Journal |
| issn | 1021-447X 2413-3051 |
| language | English |
| last_indexed | 2024-12-20T06:25:33Z |
| publishDate | 2018-03-01 |
| publisher | University of Cape Town |
| record_format | Article |
| series | Journal of Energy in Southern Africa |
| spelling | doaj.art-19643780469b4469824a004a05f2942e2022-12-21T19:50:17ZengUniversity of Cape TownJournal of Energy in Southern Africa1021-447X2413-30512018-03-01291414910.17159/2413-3051/jesa.v.1i1.27752775The impact of a fuel levy on economic growth in South AfricaThobeka Ncanywa0Nosipho Mgwangqa1University of LimpopoUniversity of Fort HareGovernment expenditure is one of the factors that could influence economic growth and it depends on borrowing or on the amount of tax revenue. A fuel levy, as an excise tax charged on petroleum products such as petrol, diesel and biodiesel, can be an important source of revenue for the government. It can, however, be a burden on fuel consumers. The present study, as an effort to address this controversy, used the vector autoregressive approach to examine the impact of fuel levies on economic growth in South Africa. The results showed a long-run unidirectional negative relationship between economic growth and fuel levy. The conclusion was that the economy needs to grow at a higher rate so as to boost tax revenues and public expenditure. Strong revenue collection, therefore, depends on highly increasing economic growth and efficient tax administration. The implication of a growth-oriented tax system is to minimise distortions created by the tax system and create incentives for drivers of economic growth.https://journals.assaf.org.za/jesa/article/view/2775excise taxtax revenuevector error correction modelexpenditure |
| spellingShingle | Thobeka Ncanywa Nosipho Mgwangqa The impact of a fuel levy on economic growth in South Africa Journal of Energy in Southern Africa excise tax tax revenue vector error correction model expenditure |
| title | The impact of a fuel levy on economic growth in South Africa |
| title_full | The impact of a fuel levy on economic growth in South Africa |
| title_fullStr | The impact of a fuel levy on economic growth in South Africa |
| title_full_unstemmed | The impact of a fuel levy on economic growth in South Africa |
| title_short | The impact of a fuel levy on economic growth in South Africa |
| title_sort | impact of a fuel levy on economic growth in south africa |
| topic | excise tax tax revenue vector error correction model expenditure |
| url | https://journals.assaf.org.za/jesa/article/view/2775 |
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