SARB Repo rate cut South Africa

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SA’s richest citizens could be hit with new ‘wealth tax’ to save the economy

It’s reported that the people with the most money in South Africa will be asked to fork out a little more this year, as part of an alleged ‘wealth tax’.

SARB Repo rate cut South Africa

Photo: AdobeStock

As South Africa mulls a range of options to mitigate the effects of lockdown and a global health crisis, one option on the table takes a leaf straight out of Robin Hood’s playbook. It has been reported that the government are considering the implementation of a “one-off wealth tax” to balance the books.

If you’ve got it, pay up…

According to information gathered by Rapport, the proposal comes from a group of economists, led by former South African National Treasury budget chief Michael Sachs.

We won’t sugarcoat it: The economic forecast for this quarter is grim, with GDP predicted to shrink by more than 6%. A jobs bloodbath waits on the horizon, and navigating this nigh-on impossible task remains an unenviable job for those in power. This week, finance minister Tito Mboweni is expected to come to the party.

Although a range of financial interventions have already been established, Mboweni is set to deliver the blueprint for an economy that needs to get back on track. Aided by the Solidarity Fund and billion-rand donations from South Africa’s four richest people, the ANC are set to cast their net a little wider.

Who would have to pay a wealth tax?

It’s understood that the wealth tax would apply to the richest of the rich, targeting people like our dollar-millionaires and high net-worth individuals. However, given the grave nature of this fiscal black hole, the definition of who makes the top 1% or so could be expanded to generate more funds.

It comes at a time where everyone who has a bit to spare is being asked to dig deep. Mary Oppenheimer and her daughters have also sent a billion to the national relief fund. Meanwhile, MPs and ministers have been asked to take a 33% pay cut, and they will donate that portion of their salary to help prop up the state coffers.