benefits Civil society organizations are calling for the R350 Covid-19 Social Relief Fund (SRD) to be financed by a higher tax rate applied to with ‘top 1% earners in South-America’.
Aid funding has become an issue in the country, with the National Treasury reporting it will cost at least Rs 50 billion per year to do so. continues the temporary R350 monthly allowance originally introduced in 2020 to protect those vulnerable to the pandemic. .
Speaking to ENCA, Amandla.mobi civic organization spokesman Tlou Seopa says the South African Revenue Service (SARS) should tax employees who receive more than one million dong a year for grants
She added that the poor in South Africa continue to get poorer while the rich continue to prosper
Inequality and the gap between different income brackets continue to worsen, says Seopa, adding that this is a problem. formed by corruption and a lack of government will, but a selective tax should still be imposed.
A recent Global Inequality Report found that the poorest 50% of working South Africans earn around Rs 12,300 a year, while the top 10 earn more than 60 times that amount, or 7,780. 300 Rupees.
Among the workers in this country, the poorest are 50 million R1,030 per month. Against the backdrop of South Africa’s staggering 33.9% unemployment rate, this paints a bleak picture.
The spokesperson added that the current income subsidy of R350 should also be increased above the food poverty line to R1355 to empower people and enable them to participate in the economy.
The Department of Social Development recently increased the income threshold for the vehicle test for the allowance from R350 to R624 per month, in line with South Africa’s food poverty line.
Prior to this change, any South African earning more than R350 per month was excluded from the SRD benefit – the barrier has now been adjusted, allowing more people to qualify.
In August this year, the South African Social Security Administration (Sassa) registered less than Rs 12 million SRD applicants. Due to the dramatic increase in the number of people eligible for benefits, the government has done more checks and balances.
Social Development Department director Brenton van Vrede said a new condition requires South Africans not to be ‘unreasonably refused’ to accept employment or educational opportunities if they are offered.
Wealth Tax
Calls for taxing to the top tier as a ‘property tax’ have been on the cards for years, with the ruling ANC raising it at this year’s national policy conference.
Mmamoloko Kubayi, chair of the ANC’s economic transformation subcommittee, said there should be a tax that targets high-net-worth individuals of 5% and large estates.
“Much of the wealth of this country is in the hands of 5% of the population. It’s not fair. We will have to ask SARS to reconsider (a property tax),” she said.
However, the national treasury and large enterprises objected to the appeal. The Treasury Department called the subsidy unsustainable and unsustainable, while business leaders said it would exacerbate capital flight problems.
The Treasury notes that wealth tax has been imposed indirectly through inheritance tax, gift tax and other taxes in South Africa.
While a new wealth tax could help reduce inequality, in practice such measures generate limited revenue, are expensive and difficult to manage, and often lead to capital flight and discourages saving and investment, the Finance Ministry said.
Research firm Intellidex echoed Treasury’s assertion that capital would leave the country. In July, the group found that targeting an already small and heavily taxed tax base was likely to lead to migration. “Some taxpayers may choose to opt out of the tax system entirely by moving to jurisdictions with lower tax rates and/or where they believe they can get a better return from the tax system. taxes they pay,” Intellidex said. “Migration is a potentially serious threat to the medium- and long-term stability of the tax system.”
