SARS Stays Out of Wealth Tax Debate Amid Budget Dispute

The South African Revenue Service (SARS) has once again declined to engage in political discussions regarding the implementation of a wealth tax, despite growing calls for such a measure.

A tax targeting the wealthiest individuals has been proposed as an alternative to increasing the burden on lower-income households, aiming to help address the National Treasury’s budget shortfall.

In response to questions during the announcement of SARS’s 2024/25 tax revenue outcomes on Tuesday, SARS Commissioner Edward Kieswetter emphasized that the agency does not take a stance on tax policy. He clarified that it is the responsibility of the Minister of Finance to make decisions on tax matters, not SARS.

Wealth tax, often seen as a way to redistribute wealth from the rich to the poor, is usually levied annually on a person’s total assets, including properties, cars, and investments. While some politicians support its potential benefits, critics argue that it is difficult to manage and may not generate significant revenue.

Kieswetter pointed out that South Africa already has implicit wealth taxes, such as the luxury car tax, capital gains tax, municipal property rates, and estate duties.

The debate over taxes intensified after National Treasury proposed a staggered one percentage point VAT increase in the March budget, which has sparked political contention and delayed the 2025 budget’s approval.

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Sourced:EWN