Hilary Joffe Columnist

When the Davis tax committee called for public submissions on a proposed wealth tax in 2017 it received more than 300 submissions. By contrast, when it called for submissions on value-added tax (VAT) a few years ago, just 22 arrived. It’s a measure, perhaps, of the extent to which VAT had fallen off everyone’s radar screens over the past quarter century since the VAT rate was last increased. But the budget proposal to raise the VAT rate by one percentage point has evoked huge controversy, much of which relates to questions of income and wealth inequality, the same questions that call for a wealth tax target. Much energy and research is now at last going into the tax, which contributes a full quarter of government revenue. It is raising some intriguing questions about how best to tax and target to ensure fiscal policy reduces rather than increases inequality. Some of that thinking was on show in a VAT seminar at the Wits University School of Economic and Business Sciences, where ther...

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