Dr Johan Jordaan (left) received the award and a cash prize from Mr Danie van den Bergh of Momentum for the best finance paper at the 2012 Personal Finance and Tax conference
A total of 26 000 job losses and a decrease of R13 billion in the nominal GDP – this is what a single percentage point increase in the interest rate can do to the South African economy.
Combining a macroeconomic model and an economic impact model based on social accounting, Dr Johan Jordaan of the CEMS Personal Finance and Research Unit found that higher income households and highly skilled individuals will feel the impact the most.
For this research, Dr Johan Jordaan received the best financial paper award at the 2012 Personal Finance and Tax conference and a cash prize sponsored by Momentum.
He also found that while highly skilled individuals experience the largest percentage drop in employment, the largest number of jobs are lost in the skilled, semi-skilled, unskilled and informal sectors of the economy where an estimated 21 736 individuals may lose their jobs.
A paper on the cost to small businesses of being tax compliant won a group of academics from the University of Pretoria the award for the best tax paper. Ms Sharon Smulders, Prof Madeleine Stighlingh, Dr Lizelle Fletcher and Prof Riel Franzsen (Director of the African Tax Institute) found that the tax compliance burden for small businesses is heavier than for their bigger counterparts.
As small businesses are viewed as the job creators it does not bode well for government’s aim to create five million jobs in the next ten years and to reduce unemployment to fifteen percent. They suggested that a simplified tax system should be introduced for small businesses.
* Story submitted by Ilze Crous
