It is not often that researchers and economists worry about our poor rural areas, but Neva Makgetla reminded us of their unacceptable plight with facts that confirm what we see for ourselves when we go there (Rural areas still economic backwaters, August 1). Sadly, what is perhaps the main cause continues to be ignored: taxation. The mass influx into urban areas was precipitated by "tax harmonisation" implemented in the mid-1990s in line with the Katz commission recommendations, which abolished all the tax breaks instituted, for all the wrong reasons, by the apartheid government. In short order, these regions and the many industries located there went from ultralow personal and company taxes with low and easily evadable general sales tax plus low fuel and other indirect taxes, to the much higher direct and indirect taxes in the rest of SA, including the formidable and efficient 14% value-added tax. Add to that the minimal locational benefits of these areas described by Makgetla and ...
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