DAVIS COMMITTEE
Experts warn wealth tax ‘a complex issue’
Net wealth taxes are ‘extraordinarily expensive and complex to administer for taxpayers and the tax authorities’, says tax policy expert
Wealth taxes, now under consideration by the Davis tax committee, are notoriously complicated and expensive both to administer and to comply with, tax practitioners say. On Tuesday, they were commenting on the committee’s call for submissions on the desirability and feasibility of a wealth tax, more particularly on a land tax, a national tax on the value of property (over and above municipal rates) and an annual wealth tax. The introduction of a wealth tax would come on top of the sharp hike in the tax rate of high-income earners announced in the 2017-18 budget, which created a new tax bracket of 45% for those earning more than R1.5m. It is expected to raise about R127bn. Government’s need for additional sources of tax revenue is likely to be heightened if the recent credit-ratings downgrades of SA to junk status have a significant effect on government’s borrowing costs and on the rate of economic growth. PwC tax policy leader Kyle Mandy said that the trouble with net wealth taxes w...
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