‘Estate duty scheme won’t produce vast sums of money’
14 September 2015
Posted by: Author: Ingé Lamprecht
Author: Ingé Lamprecht (Moneyweb)
But will bring added legitimacy to the system – Judge Dennis Davis.
An amended estate duty scheme won’t add vast amounts of money to government coffers, but will bring added legitimacy to the system, the chair of the Davis Tax Committee has said.
Speaking at the 5th Annual Fiduciary Institute of Southern Africa (Fisa) Conference on Thursday, Judge Dennis Davis estimated that changes to estate duty regulations, which currently contributes about R1 billion per annum to total government revenue of roughly R1 trillion, won’t add much more than an additional R2 billion or R3 billion.
His comments follow the release of the Davis Tax Committee’s interim report on estate duty for public comment in July.
Davis said fundamentally fiscal policy has to achieve a very fine balance. It has to make adequate provision for the lowest deciles of the population by way of an effective tax and transfer system. Otherwise the level of social instability currently encountered will be child’s play compared to what it would be.
But on the other hand fiscal policy also has to create sufficient space for the highest decile to invest, to become more entrepreneurial, to have some certainty and to secure vested interests as far as possible.
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This article first appeared on moneyweb.co.za.