The Impact of the Coronavirus in South Africa Will be Shaped by its Unequal Society

Based on a new study on wealth inequality in South Africa, researchers propose a progressive solidarity wealth tax. This would allocate the fiscal burden of current interventions on those most capable of paying. It is in line with the recommendations recently made by the International Monetary Fund to equitably attain fiscal sustainability and better position the economy for post-COVID recovery. Research shows that a wealth tax on the richest 354,000 individuals or 1% of the adult population, could raise at least R143 billion. That equates to 29% of the announced R500bn fiscal cost of the relief package. Critics of a wealth tax argue that it would be too costly and complex to implement. But South Africa is well positioned to administer this tax cost-effectively.

SOURCE: THE CONVERSATION