South Africa’s richest face three new wealth taxes: report
Both the finance ministry and the Davis Tax Committee this week have taken steps to formulate at least three new taxes to improve the standard of living for South Africa’s poorest and meet revenue targets amid sluggish economic growth.
According to a report by Fin24, the finance ministry has asked for an official study into the introduction of an annual wealth tax as a means for government to boost the standard of living of South Africa’s black majority.
Speaking to Fin24 via text message, Judge Dennis Davis confirmed that the finance ministry’s study had been requested by ex-finance minister Pravin Gordhan before he was removed from the position.
“The distribution of wealth in South Africa is highly unequal,” said Davis.
“It is well-established that economic inequality inhibits economic growth and undermines social, economic and political stability.”
The Davis Tax Committee, which is responsible for making tax recommendations to the National Treasury, also requested submissions from the public on the feasibility of a land tax and a national tax on the value of property, in a statement sent out on the same day.
These new property and land taxes would be in addition to the current estate duty, transfer duty and a donations tax, said the Davis committee in a statement. It will receive public comments until May 31 before holding hearings into the new taxes.
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