South Africa, the continent’s richest economy, is planning to lower the threshold for its High-Wealth Individual (HWI) tax unit to draw more millionaires into its revenue net. This move aims to boost government income without resorting to broad-based tax hikes that often face public resistance. The strategy mirrors a similar push in Nigeria, where reforms also focus on increasing contributions from high-net-worth individuals. Both nations are grappling with sluggish growth and mounting debt, making wealthy citizens a key target for closing fiscal gaps. However, this approach carries a significant risk of capital flight, as affluent individuals may relocate assets or seek second citizenship. Despite this challenge, the potential revenue gains are substantial, positioning wealth taxation as a central, if contentious, pillar of fiscal strategy in Africa’s leading economies.
Nairametrics
