Cosatu moots wealth tax for rich

Cape Town - Government should bulk-up its coffers by imposing a wealth tax on individuals who earn more than R1m a year, as well as increasing company tax.

This proposal was put to parliament on Friday by the People's Budget Coalition, an organisation which includes Cosatu, Numsa and the South African Council of Churches.

But Business Unity South Africa (Busa) warned increasing taxation will be counter-productive; economic growth is needed to erase the country's revenue deficits.

Busa deputy chief executive Raymond Parsons told a joint sitting of parliament's financial committees that South Africa's economic growth needed to be at least 5% a year between now and 2025, by which time government wants the economy to have doubled its current size.

Economic growth of 2.3% is expected for this year. Parsons said this merely puts South Africa on the same level as a year ago. Next year 3.5% growth is expected.

One thing that Busa and the coalition have in common is their belief that the environmental tax announced in the Budget has been introduced at an inappropriate time.

The state must allow its tax base to grow - and not attack it, Parsons warned.

Parliamentary Cosatu official Prakashnee Govender said the trade federation supports higher taxes for both wealthy individuals and companies.

Cosatu is concerned that company tax has in recent years declined disproportionately to what individuals are paying.

- Sake24.com

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