An investigation into the introduction of a new wealth tax in South Africa

In a world of economic uncertainty and manifold social problems, South Africa has its own unique challenges of low economic growth, persistent budget deficits that produce increasing government debt and the highest level of economic inequality in the world. The history of injustice and economic marginalisation and the failure of the economy to provide inclusive growth drives an urgent need to address economic inequality through tax policy, placing ever more focus on wealth taxes as a possible solution. There is a hope is that taxing the wealthy may provide the opportunity to redistribute desperately-needed resources to those denied the opportunity to build wealth and who are trapped in the cycle of poverty. Yet, as appealing as a new wealth tax may seem, the introduction of such a tax carries with it a range of risks, not all of which are known. Of great concern is the possible effect on the economy, which, in its vulnerable state, cannot afford any loss of capital and investment. Very little research has been done on wealth tax in the South African context and there is a dearth of literature focusing on the views and perceptions of the wealthy individuals themselves. This qualitative study investigates the merits and disadvantages of a new wealth tax and seeks to identify any unintended consequences that could result from the implementation of a new wealth tax in South Africa, drawing from historical and international experience and primary data obtained from interviews with individuals likely to be affected by such a tax. Having explored the literature and international experiences with wealth tax and having probed the thinking of wealthy individuals who would be the payers of a wealth tax, the study finds that a new wealth tax may contribute towards the progressivity of the tax system, but it is doubtful whether such a tax would provide a sustainable revenue stream that would be sufficient to address economic inequality and there is a risk of causing harm to the economy. Recognising that the motivation for wealth taxes is often driven more by political argument and public perception than by rational quantitative analysis, the study also anticipates the introduction of a new wealth tax and suggests guidelines for the design of such a tax within the framework for evaluating a good tax system. This study informs the debate on wealth taxes in South Africa and contributes to the design of such a tax, should it be implemented

Investigating a new wealth tax in South Africa: Lessons from international experience

In recent years, there has been an increasing focus on new sources of taxation, including wealth tax. In South Africa, two phenomena have driven the focus on wealth tax. Firstly, the need for additional tax revenue to fund an ongoing and growing budget deficit, exacerbated by a prolonged period of low economic growth, rising government debt and a very small base of individual taxpayers. Secondly, the fact that South Africa has one of the most unequal societies in the world. The dual demands of increased tax revenue and economic inequality have converged around wealth tax as a possible panacea to both problems. Although South Africa has a long history of wealth transfer tax in the form of estate duty and donations tax, there has never been a tax on the net wealth holdings of individuals during their lifetime. Internationally, numerous countries have used wealth tax in various forms, including inheritance tax, gift tax, recurrent wealth tax and non-recurrent wealth tax. This study examines some of the international experiences with these three categories of wealth tax, seeking lessons and experiences that can inform the debate around the viability of a new wealth tax in South Africa

Risk factors for Coronavirus disease 2019 (Covid-19) death in a population cohort study from the Western Cape province, South Africa

Risk factors for coronavirus disease 2019 (COVID-19) death in sub-Saharan Africa and the effects of human immunodeficiency virus (HIV) and tuberculosis on COVID-19 outcomes are unknown. We conducted a population cohort study using linked data from adults attending public-sector health facilities in the Western Cape, South Africa. We used Cox proportional hazards models, adjusted for age, sex, location, and comorbidities, to examine the associations between HIV, tuberculosis, and COVID-19 death from 1 March to 9 June 2020 among (1) public-sector “active patients” (≥1 visit in the 3 years before March 2020); (2) laboratory-diagnosed COVID-19 cases; and (3) hospitalized COVID-19 cases. We calculated the standardized mortality ratio (SMR) for COVID-19, comparing adults living with and without HIV using modeled population estimates.Among 3 460 932 patients (16% living with HIV), 22 308 were diagnosed with COVID-19, of whom 625 died. COVID19 death was associated with male sex, increasing age, diabetes, hypertension, and chronic kidney disease. HIV was associated with COVID-19 mortality (adjusted hazard ratio [aHR], 2.14; 95% confidence interval [CI], 1.70–2.70), with similar risks across strata of viral loads and immunosuppression. Current and previous diagnoses of tuberculosis were associated with COVID-19 death (aHR, 2.70 [95% CI, 1.81–4.04] and 1.51 [95% CI, 1.18–1.93], respectively). The SMR for COVID-19 death associated with HIV was 2.39 (95% CI, 1.96–2.86); population attributable fraction 8.5% (95% CI, 6.1–11.1)

IFRS and FPI nexus: does the quality of the institutional framework matter for African countries?

The institutional framework of an African country may influence the effectiveness of the International Financial Reporting Standards (IFRS) on foreign investment inflows. The purpose of this paper is to argue that the quality of a country's institutional framework impacts the effectiveness of IFRS to an adopting country and ultimately influences the levels of Foreign Portfolio Investment (FPI)

Miscellaneous provisions

Miscellaneous provisions pertaining to tax administration are explained in this chapter

Audit, investigation, search, seizure and access to information

Chapter 5 of the Tax Administration Act, which supplements the various fiscal statutes, empowers SARS to call for information on taxpayers, conduct audits, investigations and in certain instances to search premises and seize goods and records. For this purpose, taxpayers are required to keep proper books and records (see § 8.2 and § 4). The purpose of a tax audit is to verify the accuracy and timing of an assessment, but more specifically to ensure accuracy and full disclosure in terms of the law. In the event that an audit reveals non-compliance, criminal and/or civil charges may be initiated by SARS (see § 8.5)