SUMMARY
This article is primarily concerned with assessing the optimum rate of governmentintervention by means of tax revenue policies that would facilitate the full growth potentialof the South African economy, using time series data for the period 1960 to 2007. In theanalysis a balanced budget is assumed, which means that the level of expenditure is setequal to tax collection with no provision for borrowing. The results indicate that the actualaverage tax burden far exceeds its optimum level, and that the authorities will have toconsider adjusting tax policy accordingly in order to improve the growth performance of theeconomy.