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The National Treasury estimates that 235,542 taxpayers contribute 33.1% of total individual income tax. Of 7,888,615 individual taxpayers, 569,351 contribute 49.1% of all personal income tax (2023/24 financial year).
Should a wealth tax be implemented, SA’s already greatly strained and narrow tax base will be subjected to yet more pressure. Some of the high-net-worth individuals may then see their lifestyle and investment options better served in other countries.
As tempting as it may be, a wealth tax would only be a temporary plaster on the gaping wound that is low economic growth. Implementing a wealth tax assumes that there is more tax to be gained from an extremely limited pool of taxpayers, and that the government spends the tax revenue it already collects in an efficient manner, with waste and corruption virtually nonexistent.
The latter is assuredly not the case; the former, if explored, could chase more taxpayers out of the country. High-growth reforms are there to be had. Pursuing the wealth tax route would send a macro signal that the government is unwilling to make the policy and legislative choices required to spur higher growth rates.
Chris Hattingh Centre for Risk Analysis
JOIN THE DISCUSSION: Send us an email with your comments to letters@businesslive.co.za. Letters of more than 300 words will be edited for length. Anonymous correspondence will not be published. Writers should include a daytime telephone number.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
LETTER: Taxpayers under pressure
The National Treasury estimates that 235,542 taxpayers contribute 33.1% of total individual income tax. Of 7,888,615 individual taxpayers, 569,351 contribute 49.1% of all personal income tax (2023/24 financial year).
Should a wealth tax be implemented, SA’s already greatly strained and narrow tax base will be subjected to yet more pressure. Some of the high-net-worth individuals may then see their lifestyle and investment options better served in other countries.
As tempting as it may be, a wealth tax would only be a temporary plaster on the gaping wound that is low economic growth. Implementing a wealth tax assumes that there is more tax to be gained from an extremely limited pool of taxpayers, and that the government spends the tax revenue it already collects in an efficient manner, with waste and corruption virtually nonexistent.
The latter is assuredly not the case; the former, if explored, could chase more taxpayers out of the country. High-growth reforms are there to be had. Pursuing the wealth tax route would send a macro signal that the government is unwilling to make the policy and legislative choices required to spur higher growth rates.
Chris Hattingh
Centre for Risk Analysis
JOIN THE DISCUSSION: Send us an email with your comments to letters@businesslive.co.za. Letters of more than 300 words will be edited for length. Anonymous correspondence will not be published. Writers should include a daytime telephone number.
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