South Africa is a country of vast inequality with huge unmet developmental needs, but squeezing the affluent for more tax is easier said than done and could even be costly and counterproductive.

A new paper, co-authored by Chris Axelson, acting head of tax and financial sector policy at the National Treasury, shows empirically that there is little space to wring more out of South Africa’s highest-income groups by hiking personal income tax (PIT) further...

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