South Africa launches public debate on possible wealth tax

PUBLISHED: Wed, 26 Apr 2017 12:05:50 GMT

A committee set up to review South Africa’s tax system on Tuesday launched a public debate on one of the most controversial possible moves on its agenda – a wealth tax.

The Davis Tax Committee (DTC) announced it was inviting submissions from South Africans on whether the government should implement such a tax to lessen the glaring inequality in Africa’s most industrialised economy.

“The DTC was specifically requested by the minister of finance to inquire as to whether it would be appropriate to introduce additional forms of wealth taxation and the feasibility of doing so,” the team said in a statement.

“The distribution of wealth in South Africa is highly unequal.”

Appointed by former Finance Minister Pravin Gordhan in 2013 and headed by judge Dennis Davis, the Davis Tax Committee is tasked with assessing the role of the tax system in promoting growth, jobs, development and fiscal sustainability.

It said it was inviting submissions by the end of May on the desirability and feasibility of wealth taxes on land and property over and above those charged currently by municipal authorities, or a national wealth tax.

The committee plans to meet next month to discuss submissions.

President Jacob Zuma has called for a radical transformation of the economy following losses in local elections last year partly caused by anger over deep inequality that persists more than two decades after apartheid.

South Africa is grappling with weak economic growth and unemployment of more than 25 percent. The white minority still controls a disproportionately big share of the economy.

(Reporting by TJ Strydom; Editing by James Macharia and Andrew Roche)

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