Experts at Tax Consulting South Africa warn that the ANC’s renewed position on taxing the country’s wealthiest individuals to fund a basic income grant could push them offshore, adding further strain to the tax base.<\/p>\n
At the party’s policy conference held at the end of July, the ANC said that a wealth tax is the preferred option<\/a><\/strong> to fund a basic income grant in South Africa, with delegates pointing specifically to the top 5% of earners in the country who hold “a majority of wealth”.<\/p>\n “The majority of the wealth of this country is in the hands of 5% of the population. That’s not right. We’ll have to have SARS look into (a wealth tax),” the party said.<\/p>\n The statement, which appears as an initial step to establishing a permanent basic income grant, is supported by a study conducted by the University of Witwatersrand, Tax Consulting said.<\/p>\n The study titled “Coronavirus: why South Africa needs a wealth tax now” speculated that “a wealth tax on the richest 354,000 individuals could raise at least R143 billion”. To fund the ANC’s proposed basic income grant of R350 for unemployed adults, the state would only need half of that<\/a><\/strong>.<\/p>\n However, the tax experts warned that even though R143 billion seems like a staggering amount, it is still far from addressing the deep inequality that persists in South Africa – and could ultimately do more harm than good.<\/p>\n In a note published this week,\u00a0 the group said that one key concern of the proposed wealth tax is the exodus of the “High Net Worth Individuals”, who would be the subject of such tax if imposed.<\/p>\n