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News & Press: Opinion

Call to tax super rich

06 March 2014   (2 Comments)
Posted by: Author: Sipokazi Fokazi
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Author: Sipokazi Fokazi (Business Report)

Civil society organisations and trade unions believe the super rich should pay a solidarity tax to enable the National Health Insurance (NHI).

Addressing the parliamentary oversight committee on finance, the Budget and Expenditure Monitoring Forum – comprising the Treatment Action Campaign, Section27, Black Sash, Sonke Gender Justice Network and the National Union of Mine Workers of SA(Numsa) – said for NHI to be implemented, the Reserve Bank should review not only its budget deficit, but its low tax regime.

Forum co-ordinator Thokozile Madonko said that based on current growth it was estimated that the multibillion-rand health insurance would face a shortfall of more than R47 billion by 2016.

The forum said options the government could pursue to stimulate growth were to increase income tax, particularly for the country’s super rich through solidarity tax, subject luxury goods to a high rate of VAT and increase the number of basic goods which were VAT zero rated, including food, medicines and water.

"What we’ve been seeing is a government that’s been giving huge tax breaks to the super wealthy through incentives. These super wealthy don’t really feel the tax pinch… they benefit from the infrastructure, such as roads and street lights, which everybody is being taxed on… We need to review our tax system to ensure that projects such as NHI receive adequate funding. With the current growth the NHI will never be successful. We need to do something drastic, and the super wealthy need to contribute towards this drastic growth,” said Madonko

The Federation of Unions of SA said while the country had made steady progress in the areas of education and health and had established NHI pilots, the government would have to address funding constraints and inefficiencies at public facilities.

This article first appeared on iol.co.za.

Comments...

Joanna N. Haralambous (Socha) says...
Posted 14 March 2014
It is not sustainable for the minority to be funding the majority as one can only 'tap so much blood out of a stone'. We need to change the culture of complete non payment in this country. The NHI would only work if everyone contributes, of course the super rich would be paying more. To explain in certain countries the NHI is set at a percentage (eg 9%) of an individuals remuneration. So if you are earning R2,000.00 per month your contribution is R180.00, if you are earning R30,000.00 per month your contribution is R2,700.00. There should however be a capped amount in place. One should also mention that there is also a very broad based tax system in place in this country, so if you are earning R2,000.00 per month you are also paying R200.00 in tax. I believe the more taxpayers we scoop into the net the better it would be for all, you take pride in the things you pay for. That being said the higher income earners would obviously be paying more.
Joffre Papenfus says...
Posted 14 March 2014
I have always lived under the misconception that you stimulate growth through responsible government, and through PRODUCTIVITY; I also (apparantly wrongly) believe that EVERYONE need to contribute financially in stead of simply demanding hand-out's; social benefit funds are for the TRULY needy people, generally children, the medically incapacitated and the elderly. Any "solidarity tax" is nothing less than a greedy money-grab. More can be gained by these pundits and their supporters starting to work PRODUCTIVELY and by stamping out government corruption. The one sensible comment relates to VAT: a consumption tax aimed at choice is much fairer than most other measures aimed at expanding tax collections.

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