By: Natasha Archary
South Africa’s Finance Minister, Enoch Godongwana says the country can afford a R350 Basic Income Grant. Provided the ruling party cuts back on its social spending costs.
Speaking at the conclusion of the ANC’s Policy Conference, Godongwana said the introduction of a Basic Income Grant is on the cards.
“The fiscus can afford to do so at a cost. That means we’ll have to cut a number of social spending somewhere to fund it.”
Finance Minister Enoch Godongwana says a Basic Income Grant is on the cards
Introducing the grant will most likely come via funding from the wealth tax, which was one of the key discussions at the conference which took place over the weekend.
The ANC will have SARS looking into the implementation of a wealth tax which will come from the wealthiest 5% in the country.
“Majority of the wealth in country is in the hands of 5% of the population. That is not right.”
Chair of the ANC’s economic transformation subcommittee, Mmamoloko Kubayi
However, many experts believe the introduction of a wealth tax may push the country’s wealthy individuals to relocate to countries with lower taxes.
A renewed focus on wealthy taxpayers poses a serious long-term threat to the stability of the tax system.
Treasury proposed the wealth tax in 2021, saying SARS would work on further data collection on the wealthiest in the country.
Should the plan proceed, grants will reach well over R1 trillion within 3-years, according to Godongwana.
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