Tax reports incomplete

Your front page article (Davis report: SA not ready for wealth tax, April 12) and editorial (Not a wealth of choices for SA, April 13) on the Davis tax committee’s wealth tax report refer.

It is regrettable that Business Day’s coverage of the committee’s report — titled The Feasibility of a Wealth Tax in SA — did not reflect the key recommendations and justifications in the report.

The committee’s report did not propose a long or indefinite deferral of the implementation of a comprehensive wealth tax in SA, as is intimated in your publication.

In the light of the vast historical and increasing wealth inequality in SA (the highest in the world), which is a threat to social stability, the committee is clearly in favour of the introduction of a comprehensive wealth tax as soon as possible, subject to the following:

First, a comprehensive wealth tax cannot be successfully introduced until a comprehensive picture of wealth is obtained, hence the recommendation for the South African Revenue Service to collect better information on wealth, which can be done in the next fiscal year.

Second, a significant amount of wealth is held in retirement funds.

It is hardly progressive to tax workers’ savings as part of a wealth tax, hence the need to obtain better information on wealth and deal with the issue of retirement funds to enable the formulation of a definition of wealth that will form the basis of a workable comprehensive wealth tax.

Third, it was precisely because the Davis tax committee shares the view that steps must be taken to deal with the disastrous patterns of inequality that the report recommended a significant expansion of estate duty, to be implemented immediately given that estate duty is already an existing wealth tax. Judge Dennis Davis Chairman, Davis tax committee