Call for public comment on annual wealth tax

THE Finance Ministry has asked for a study on introducing an annual wealth tax as the government seeks to boost the standard of living of the black majority.

The Davis Tax Committee, which makes recommendations to the National Treasury, also requested submissions from the public on the feasibility of a land tax and a national tax on the value of property, in addition to existing charges, it said in a statement emailed yesterday. It will accept comments until May 31 before holding hearings.

The move comes two months after the government raised the top income tax bracket by four percentage points to 45 percent and as President Jacob Zuma has called for “radical economic transformation”.

“The distribution of wealth in South Africa is highly unequal,” the committee, led by Judge Dennis Davis, said.

“It is well established that economic inequality inhibits economic growth and undermines social, economic and political stability.”

The study was requested by former finance minister Pravin Gordhan, Judge Davis said by text message.

The Treasury is struggling to meet its revenue targets amid sluggish economic growth. The South African Revenue Service fell R30 billion short of its projection in the past fiscal year, the biggest gap in seven years. – Bloomberg