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SA could 'do an Egypt', says academic

Johannesburg - If South Africa continues to neglect the 15 million people who are either unemployed or economically inactive, the country will "do an Egypt", according to Matthew Lester, lecturer at Rhodes University.

He was taking part in a panel discussion on the 2011-2012 budget held by PricewaterhouseCoopers in Johannesburg on Friday.

Lester was referring to the recent protests in Cairo by the nation's youth against poverty and unemployment.

In SA, statistics show that out of a population of about 50 million, only 13.1 million people are employed and only two out of five people of working age have a job.

Furthermore, 15 million people are on various forms of social welfare.

Lester acknowledged that anyone who earned more than R300 000 a year was now worse off than before the budget was presented by Finance Minister Pravin Gordhan to parliament on Wednesday.

"But we live in a dream world where we are neglecting people.

"We have only 150 000 individuals in the super-tax bracket and they have to pay a bit more now.

"Government can't go over 40% on the individual tax payer - at least not without providing huge social security systems."

Lester said government had put out a message that people had to forget about the lifestyle they had led before the credit crunch - which was simply "not sustainable" - and downsize instead.

At present, the real tax rate for the individual, taking into account stealth taxes, was about 60%, he added.

Joseph Rock from the SA Revenue Service said efforts were being made to broaden the tax base.

"The reality is that if we all accept that we have to pay our fair share, then we will end up paying less and that 60% could come down."
 
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