There is a recognition in SA that developed economy welfare benefits (basic income grants) are impossible without developed economy social security taxes — of the order of a 10%-15% salary sacrifice imposed on the formally employed.        

However, higher taxes discourage growth by discouraging enterprise and encouraging the emigration of scarce skills and capital. Redistribution can also lead to slower growth by reducing the incentive to work, to be economically active. ..

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as articles from our international business news partners; ProfileData financial data; and digital access to the Sunday Times and Sunday Times Daily.

Already subscribed? Simply sign in below.

Questions or problems? Email or call 0860 52 52 00. Got a subscription voucher? Redeem it now