Government planning tax hike aimed at SA's wealthiest citizens

Government planning tax hike aimed at SA's wealthiest citizens

- South Africa's richest may well be facing an increase in taxes according to National Treasury

- Finance Minister Tito Mboweni is expected to announce new taxes in his budget speech next year

- However, this has earned some criticism from political parties who aren't sure it's the way to go

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The government is considering heavier taxes for the extremely wealthy according to National Treasury.

Briefly.co.za gathered that Finance Minister Tito Mboweni is expected to announce new taxes, including this wealth tax, in his budget speech next year.

This new tax would theoretically help to stabilise the country's growing debt burden and raise up to R40 billion over the next few years.

Treasury's Chief Director Edgar Sishi told Parliament's joint committees on finance that the plan was in the pipeline:

“The supplementary budget stated that there would be tax increases of R40bn over the next four years and this will be announced in February."
Government planning tax hike aimed at SA's wealthiest citizens

Finance Minister Tito Mboweni
Source: Facebook

READ ALSO: Budget speech: Mboweni reveals total spending will exceed R2 trillion

Documents tabled ahead of the sitting highlighted a revenue boost as a huge motivator behind this plan:

“The 2020 Supplementary Budget stated that there would be tax increases of R40bn over the next four years to help stabilise debt and that the specifics of the tax increases will be announced by the Minister of Finance in the 2021 Budget. The Davis Tax Committee has done a number of research reports on these topics, including on the viability of a wealth tax, and how it relates to a land tax, and on estate duty."

However, not all political parties are on board with this plan to target the super-rich in South Africa.

United Democratic Movement leader Bantu Holomisa explained that the government needed to source funds:

“We have no choice whether we like it or not, we have to get money somewhere to address problems in the country."

DA spokesperson on finance Geordin Hill-Lewis voiced the party's opposition to the plan:

“We do not support it because South Africa has already a progressive tax system. There is little you can gain by taxing the wealthy. What you stand to lose is that those people can move their money elsewhere. You can’t stimulate the economy by raising taxes."

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Source: Briefly.co.za

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