Submissions Open: The Desirability and Feasibility of New Forms of Wealth Tax
Taken from the Davis tax Committee announcement
The Davis Tax Committee (“DTC”) published its first and second estate duty reports on 13 July 2015 and 24 August 2016 respectively. In addition to this, the DTC was specifically requested by the Minister of Finance to inquire as to whether it would be appropriate to introduce additional forms of wealth taxation and the feasibility of doing so.
Currently, South Africa has three forms of wealth taxation, namely estate duty, transfer duty and donations tax which together bring in about 1% of tax revenue. Capital Gains Tax (CGT) is considered by some to be a form of wealth tax but the DTC has taken the view that CGT is a form of income tax. The DTC has previously considered CGT in its estate duty reports so it will not be considered further during this inquiry.
The DTC invites submissions by 31 May 2017 on the desirability and feasibility of the following possible forms of wealth tax:
1. A land tax
2. A national tax on the value of property (over and above municipal rates)
3. An annual wealth tax
Based on the written submissions received, this will be followed by a workshop for oral submissions during June 2017.
It must be said that an introduction of these “wealth taxes” will follow the trend of late that will tap even deeper into the pockets of that segment of society that already contributes significantly to the fiscal coffers. Whilst there is no doubt that Government require funds to foot a hefty bill to meet the nation’s spending demands, one would like to see more practical initiatives to, for example, stimulate commerce and industry and create jobs, thereby increasing the pool that contributes to the fiscal coffers. Surely this must be a more sustainable long term solution to fiscal stability.
If you require assistance to make a submission, please contact Anton Lockem, Head of Tax, at firstname.lastname@example.org or on +27 31 575 7413. You can also submit directly by e-mail to email@example.com or by post to PO Box 2344, Brooklyn Square, Pretoria, 0075 and indicate if an oral submission will be necessary to support the written submission.