Browsing by Subject "Incentives"

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    An evaluation of the policy on incentives: to what extent do incentives enhance the policy objectives of South Africa?
    (2025) Batwa, Lindile Matthews; Roeleveld, Jennifer
    The global trends show that developing countries and economies in transition such as South Africa are now primary foreign direct investment (FDI) destinations, and their importance as FDI recipients continues to increase. This research paper evaluates the usefulness of incentives in driving the investment policy direction of South Africa, the role of stakeholders involved in incentive schemes, and the impact on the tax base. It contributes to the assessment of the usefulness of incentives in enabling the government to achieve its policy objectives. This research commends the government's approach to drafting its policy objectives in line with National Development Plan 2030. It is a plan that has consideration of global trends, and it is an appropriate panacea for the domestic policy framework that brings about foreign direct investment through initiatives such as incentives. Tax incentives are not the primary determinant of the decision to invest. Most investors base their investment decisions not only on economic and commercial factors. Incentives function as a reward to investors who would invest without incentives rather than encouraging investors who would otherwise not invest or go elsewhere. It is clear that non-tax incentive considerations outweigh tax incentive considerations, but it is also argued that tax incentives could effectively address environmental challenges and change consumer behaviour. However, these incentives are generally more effective in combination with other policy instruments. Furthermore, this research finds that — because of the corruption or perception thereof — the deteriorating economic environment has exerted huge pressure on South Africa's public debt, due to the pressure placed on the government to finance its budget. The fiscal challenges that South Africa faces cannot be solved with ‘more' incentives but rather a strategic balance with other measures. The scale and variety of South Africa's investment incentives will continue to be a contested debate. However, while it is also clear that the revenue base is shrinking, it is difficult to envisage an investment policy strategy without incentive schemes. Incentives should be seen not as a problem and a drain on the fiscus but as an integral part of the solution.
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    Social grants, welfare, and the incentive to trade-off health for income among Individuals on HAART in South Africa
    (Springer Verlag, 2009) Venkataramani, Atheendar S; Maughan-Brown, Brendan; Nattrass, Nicoli; Prah Ruger, Jennifer
    South Africa’s government disability grants are considered important in providing income support to low-income AIDS patients. Indeed, anecdotal evidence suggests that some individuals may opt to compromise their health by foregoing Highly Active Antiretroviral Treatment (HAART) to remain eligible for the grant. In this study, we examined the disability grant’s importance to individual and household welfare, and the impact of its loss using a unique longitudinal dataset of HAART patients in Khayelitsha, Cape Town. We found that grant loss was associated with sizeable declines in income and changes in household composition. However, we found no evidence of individuals choosing poor health over grant loss. Our analysis also suggested that though the grants officially target those too sick to work, some people were able to keep grants longer than expected, and others received grants while employed. This has helped cushion people on HAART, but other welfare measures need consideration.