The World Inequality Lab database was constructed by an international network of more than 100 academics, including Thomas Piketty and Nobel Prize winner Abhijit Banerjee, making it possible to compare income inequality in 173 countries. The estimates are based on various sources, including tax data, surveys, and other statistics.<\/p>\n\n\n\n
Interestingly, to better understand the global significance of being among the top 1% of South Africa\u2019s wealthiest individuals, Knight Frank\u2019s Wealth Sizing Model compared this to 25 other countries and what it takes to be considered a 1% earner in their jurisdictions.<\/p>\n\n\n\n
The \u201cTop 1%\u201d became a notable term during the global financial crisis, but the wealth needed to join their ranks varies considerably from country to country, said the report.<\/p>\n\n\n\n
According to the report, in annual terms<\/strong>, you need to earn $109,000 (R2.06 million) to join the top 1% of the wealthiest South Africans<\/strong>, roughly similar to the estimate of the World Inequality Lab simulator. <\/p>\n\n\n\n By contrast, Monaco\u2019s entry point \u2013 the wealthiest nation in the comparison \u2013 of $12.4 million (R234.05 million) is over R232 million more than South Africa\u2019s.<\/p>\n\n\n\n Switzerland and Australia have the next highest entry points after Monaco, requiring a net worth of $6.6 million (R124.6 million) and $5.5 million (R103.8 million), respectively.<\/p>\n\n\n\n In the United States, $5.1 million (R97.7 million) will get you over the threshold to fall into the country\u2019s wealthiest 1% of people.<\/p>\n\n\n\n To put the wealth of these top countries into perspective, a recent study<\/a> conducted by Picodi.com analysts estimated that South Africans earning the average salary in the country would have to work for at least 68 years to become a dollar millionaire ($1 million).<\/p>\n\n\n\n This means the average South African would have to work for 843 years to be accepted into Monaco\u2019s top 1%, 449 years to be in Switzerland\u2019s top 1%, and 374 years to be among the USA\u2019s wealthiest 1%.<\/strong><\/p>\n\n\n\n Not all sunshine and rainbows among the top 1% in South Africa<\/strong><\/p>\n\n\n\n While being among the top 1% of income earners may seem like a great place to be, earning such a wage means the government often targets you as a source of revenue, which remains the case in South Africa recently.<\/p>\n\n\n\n Just because it appears that the South African government has iced plans to introduce a wealth tax in the country does not mean that wealthy individuals can rest easy.<\/p>\n\n\n\n According to Elzahne Henn, Director and Head of Private Clients at Mazars in South Africa, the South African Revenue Service (SARS) has shifted to an aggressive compliance mode and is focusing on wealthy taxpayers with complex financial structures and trusts.<\/p>\n\n\n\n Wealthy families and companies often use trusts to protect and distribute assets, minimise taxes, maintain privacy over their holdings and control the timing and conditions of transfers across generations.<\/p>\n\n\n\n SARS has made its intentions of targeting wealthy taxpayers clear since it re-established the High Wealth Individual (HWI) Segment in 2021 to focus on the tax affairs of the rich. The revenue service has also strengthened its investigative capabilities and has emerged victorious in several high-profile cases.<\/p>\n\n\n\n In September 2022, SARS warned that it was increasing its focus on trusts following its analysis of tax compliance by trusts and beneficiaries \u2013 and this focus is now paying dividends, given National Treasury\u2019s boasting this week of better-than-expected tax revenues.<\/p>\n\n\n\n![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/05\/twr-top-1-1024x774.jpeg\")
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