Simulating the Impact of COVID-19 on Formal Firms in South Africa

Simulating the Impact of COVID-19 on Formal Firms in South Africa

This note uses administrative tax data for formal firms to measure the direct impact of lockdown restrictions on firms’ profitability, employment, and exit rates. The authors separate the economy into three categories, according to the size of the...

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Main Authors: Lees, Adrienne, Mascagni, Giulia, Kilumelume, Michael
Format: Brief
Language:English
Published: World Bank, Washington, DC 2021
Subjects:
CORONAVIRUS
COVID-19
PANDEMIC IMPACT
WAGE SUBSIDY
CORPORATE INCOME TAX
REVENUE LOSS
FIRM PERFORMANCE
EMPLOYMENT
Online Access:http://documents.worldbank.org/curated/en/434821610951466843/Simulating-the-Impact-of-COVID-19-on-Formal-Firms-in-South-Africa
http://hdl.handle.net/10986/35052
id okr-10986-35052
recordtype oai_dc
spelling okr-10986-350522021-04-23T14:02:15Z Simulating the Impact of COVID-19 on Formal Firms in South Africa Lees, Adrienne Mascagni, Giulia Kilumelume, Michael CORONAVIRUS COVID-19 PANDEMIC IMPACT WAGE SUBSIDY CORPORATE INCOME TAX REVENUE LOSS FIRM PERFORMANCE EMPLOYMENT This note uses administrative tax data for formal firms to measure the direct impact of lockdown restrictions on firms’ profitability, employment, and exit rates. The authors separate the economy into three categories, according to the size of the shock experienced, and consider two lockdown scenarios: one lasting three months and one lasting five months. These scenarios are clearly stylized and they do not necessarily reflect the reality of any country. They are, however, not too distant from the South African reality, where an initial strict lockdown was imposed for two months, followed by several months of easing restrictions and reduced eco-nomic activity. The authors estimate losses to corporate income tax (CIT) revenue, increases in firms’ debt levels, cuts in employment and their mitigation through wage subsidies, and aggregate output losses from firms’ exit. 2021-01-26T19:54:59Z 2021-01-26T19:54:59Z 2020-12 Brief http://documents.worldbank.org/curated/en/434821610951466843/Simulating-the-Impact-of-COVID-19-on-Formal-Firms-in-South-Africa http://hdl.handle.net/10986/35052 English MTI Practice Notes;No. 9K CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Brief Africa Africa Eastern and Southern (AFE) South Africa
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic CORONAVIRUS
COVID-19
PANDEMIC IMPACT
WAGE SUBSIDY
CORPORATE INCOME TAX
REVENUE LOSS
FIRM PERFORMANCE
EMPLOYMENT
spellingShingle CORONAVIRUS
COVID-19
PANDEMIC IMPACT
WAGE SUBSIDY
CORPORATE INCOME TAX
REVENUE LOSS
FIRM PERFORMANCE
EMPLOYMENT
Lees, Adrienne
Mascagni, Giulia
Kilumelume, Michael
Simulating the Impact of COVID-19 on Formal Firms in South Africa
geographic_facet Africa
Africa Eastern and Southern (AFE)
South Africa
relation MTI Practice Notes;No. 9K
description This note uses administrative tax data for formal firms to measure the direct impact of lockdown restrictions on firms’ profitability, employment, and exit rates. The authors separate the economy into three categories, according to the size of the shock experienced, and consider two lockdown scenarios: one lasting three months and one lasting five months. These scenarios are clearly stylized and they do not necessarily reflect the reality of any country. They are, however, not too distant from the South African reality, where an initial strict lockdown was imposed for two months, followed by several months of easing restrictions and reduced eco-nomic activity. The authors estimate losses to corporate income tax (CIT) revenue, increases in firms’ debt levels, cuts in employment and their mitigation through wage subsidies, and aggregate output losses from firms’ exit.
format Brief
author Lees, Adrienne
Mascagni, Giulia
Kilumelume, Michael
author_facet Lees, Adrienne
Mascagni, Giulia
Kilumelume, Michael
author_sort Lees, Adrienne
title Simulating the Impact of COVID-19 on Formal Firms in South Africa
title_short Simulating the Impact of COVID-19 on Formal Firms in South Africa
title_full Simulating the Impact of COVID-19 on Formal Firms in South Africa
title_fullStr Simulating the Impact of COVID-19 on Formal Firms in South Africa
title_full_unstemmed Simulating the Impact of COVID-19 on Formal Firms in South Africa
title_sort simulating the impact of covid-19 on formal firms in south africa
publisher World Bank, Washington, DC
publishDate 2021
url http://documents.worldbank.org/curated/en/434821610951466843/Simulating-the-Impact-of-COVID-19-on-Formal-Firms-in-South-Africa
http://hdl.handle.net/10986/35052
_version_ 1764482213670289408

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