Proposed wealth tax could push South Africans to emigrate, says economists
A wealth tax could lead to the reduction of the tax base over time as a small group of affluent South Africans try to prevent a higher tax burden, says the Bureau of Economic Research .
The proposal, first mooted at the ANC’s national conference in 2017, calls for an appropriately structured wealth tax, possibly linked to a land tax, to promote equity and raise revenue, the newspaper said. The target should ideally be the top 5% of high net worth individuals, and estates with significant assets, Kubayi is quoted as saying.
Intellidex added that emigration is a potentially severe threat to the tax system’s medium- and long-run stability. He said that the country’s tax options have become increasingly limited against the current economic backdrop of slow growth, load shedding, skyrocketing unemployment and rising inflation.
The BER said that a wealth tax stands in contrast to other funding methods, including increasing the VAT rate or the personal income tax rate for all taxpayers.
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