TARGETING THE WEALTHY

WEDNESDAY’S Budget re-emphasised the government's intention to ensure that wealthy South Africans pay Caesar what is due to Caesar.

To this end, provisional taxpayers with assets over R50 million will be required to declare specified assets and liabilities at market values in their 2023 tax returns.

In a Cliffe Dekker Hofmeyr presentation on the Budget on Wednesday, Emil Brincker, director and head of the firm’s tax and exchange control practice, pointed out that there was already a heavy tax burden on upper-middle-class and wealthy citizens. Brincker said that, as a portion of total revenue, personal income tax is increasing each year, from 37.2% in 2016/17 to 39.1% this year. “When you look at who is actually paying the taxes, 20% of taxpayers – those with an annual income of over R500 000 – contribute over 70% of personal income tax.”

Brincker said that SARS was expecting to collect more from highnet-worth (HNW) individuals, “but I am not sure that will be the case”. He said many of these individuals were emigrating, with SARS and the country losing out as a result.

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