Wealth tax can help tackle poverty

THE results of a new survey in support of a wealth tax on multimillionaires in the country is a welcome development. It can assist in tackling poverty and stop the widening gap between the rich and the poor.

The poll, conducted by an international research agency Glocalities, shows that 60% of people support the proposal that people who own more than R150 million should pay an extra annual tax of 1% of their annual wealth to fund the recovery and help people in need.

The poll confirms the high level of support for redistributive policies and the concrete form it could take through a wealth tax.

According to the poll, 78% of ANC voters have given the proposal the green light, with only 9% opposed.

South Africa has always been regarded as one of the most unequal societies in the world, and the introduction of the wealth tax should be used to uplift the most vulnerable members of society.

What makes the proposal urgent is the fact that the unemployment rate reached 32.6% in the first three months of the year, and the emergence of Covid-19 has brought untold harm among the poorest of the poor.

When looking at the World Bank's recent statistics that 100 million people were pushed into poverty last year, it's easy to see how the proposal of taxing people with a high net worth can be an attractive option.

Getting the richest people to pay more tax towards the fiscus can go a long way towards plugging the hole that exists due to the dwindling taxpayer base. It is estimated that the wealth tax can raise up to R160 billion for government coffers. The state can use the money to implement muchneeded infrastructure programmes and social upliftment initiatives to tackle the high rate of poverty.

However, the wealth tax proposal will not be effective if money raised is looted through corruption. The money raised should be strictly monitored and be used for the purpose for which it was intended. Otherwise, the proposal would be another scheme to enrich politicians and their friends.