Katlego Sekhu
Xhanti Payi, a Senior Economist at Price Waterhouse Coopers (PWC), recently joined 959 Breakfast to discuss the implications of the increasing number of high-net-worth individuals migrating to other countries.
According to Xhanti, there are several factors to consider. He explains that many wealthy individuals have been leaving South Africa for some time now, especially since the “exchange controls have been relaxed. “Additionally, the “physical immigration” of people is another aspect to examine.
One of the reasons for this migration is the comparatively “high tax rates” in South Africa. However, others are leaving because of the “quality of life or to avoid crime.” However, those with business interests continue to pay taxes in South Africa.
However, the departure of high-net-worth individuals still has a negative impact on the economy. “The country loses out on valuable VAT revenue due to their significant expenditures in South Africa.”
Furthermore, Xhanti points out that this situation further burdens consumers, who are already under financial strain. “As you may have noticed, those facing high-interest rates and low income have reduced their spending. These wealthy were the ones we hoped would support the economy, and their departure is indeed disheartening,” he said.
Read Next: Illegal mining operation worth millions shut down in Mpumalanga
