Davis Tax Committee invites submissions on wealth tax to tackle inequality

The Davis Tax Committee (DTC) has launched a public debate and invited submissions on whether the government should implement wealth tax to lessen inequality.

The committee was appointed by former Finance Minister Pravin Gordhan in 2013 to find out whether it would be appropriate to introduce additional forms of wealth taxation and the feasibility of doing so.

Wits University's Professor Patrick Bond says wealth tax is necessary given the higher inequality rates in South Africa.

Both argues that the rich are not being taxed enough.

We should be taxing them more. And an inequality rate, which is the reason, is now the highest in world.

Professor Patrick Bond

He argues that the money would benefit the economy better if redistributed to the poor.

Economist Xhanti Payi says he agrees with Bond that a wealth tax could help to stabilise the rand.

However, Xhanti says a lot of wealth is hidden and government may end-up taxing the wrong people.

There are two questions, the first is will you tax wealth in stocks, for example, Patrice Motsepe has how much millions, or will you be taxing growth of that wealth. If you taxing growth of wealth, we are already doing that... If they are talking about growth, we are going to impose it on South Africans as well.

Xhanti Payi, economist and Nascence Advisory co-owner

Is it about reparations or collecting more taxes. If it's about reparations we can't ask Patrice Motsepe to make reparations for apartheid or to contribute to sort of redistribution, it seems a bit unreasonable.

Xhanti Payi, economist and Nascence Advisory co-owner

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