Towards Inclusive Fiscal Policy: A Disability-Responsive Taxation Framework for Equity and Economic Empowerment

Abstract

Introduction: Disability in South Africa remains a key driver of socioeconomic inequality, affecting labour market participation, income security, and access to social protection. Conventional fiscal instruments, including medical tax credits and deductions, favour formally employed, higher-income taxpayers, leaving many persons with disabilities fiscally excluded. This study used a mixed-methods secondary analysis of peer-reviewed literature, policy documents, labour force data, disability grant records, and household cost estimates to develop a conceptual framework for disability-responsive fiscal inclusion. Results: Labour force data indicate that 10.2% of individuals outside the labour force are due to illness or disability, while discouraged jobseekers rose from 15.2% (2016) to 20.6% (2025). Households with severe disabilities face opportunity costs estimated at R2441 per month from lost earnings, caregiving, transport, and medical expenses. Disability grant patterns show male dominance in permanent disability grants for ages 18–45, with females surpassing males at 50–60. Temporary disability grants follow similar trends, with male predominance in the 18–35 age range and female predominance in the 40–60 age range. These findings reveal systematic gender- and age-related inequities in access to fiscal relief. Conclusions: Existing tax measures insufficiently address the financial burden of disability, disproportionately favouring urban, formally employed households. Implementing refundable tax credits, simplifying administrative processes, and adopting gender- and age-sensitive policies can enhance fiscal inclusion, reduce inequities, and strengthen economic participation for persons with disabilities in South Africa. This study proposes a framework to guide policymakers in implementing refundable disability tax credits, simplifying administrative processes, and targeting vulnerable groups, including older women, rural households, and low-income earners, to enhance fiscal inclusion, equity, and access to essential services.