Attorney Michael de Broglio on: South Africa, Law, Politics, Attorneys, Sport, Photography, Technology, Gadgets, Media, Crime, Road Accidents Fund,
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The Davis Tax Committee is headed by Professor Dennis Davis. I had the pleasure of having him lecture me when I was at Wits University and I have to say he is an incredibly smart man. That is not something that most wealthy people are going to enjoy and I do hope, while convening his Tax Committee on taxes for the wealthy, that he thinks about the damage that too many taxes on too few can do as well. It is quite obvious where they will be looking, to some extent, because in the press release they issued in May they say that estate duty, transfer duty and donations tax are the only wealth taxes at the moment and they contribute only 1% of tax revenue.
In other words, they must be considering increasing estate duty, transfer duty on houses and donations tax as well. They also say though that they like to look at a number of possible forms of wealth tax, including – land tax, a national tax on the value of property over and above municipal rates and an annual wealth tax. Many countries have taxes on property. It is quite common in America where, for example, and the rate would vary from city to city and from state to state, but it would often be that whatever the value of your house is, as assessed by the local government, you pay 2% taxes a year. That is obviously one of the considerations they are looking at, which will affect more than just the wealthy, depending on what amounts they bring in with that. If, for example, they bring in a 1% tax per year on the value of somebody’s house at R500,000, then if your house is valued at R800,000 you will pay R8,000 a year in property tax. I just give that as a complete random example, but it gets more expensive as your property value goes up. An annual wealth tax on top of the top rate of 45%, which we already have, sounds astounding. I cannot imagine what else they would require, but I have a very good feeling what is going to be defined as wealth will be any amount earned above R1,5 million a year.
My problem with most of these taxes, apart from the damage they do to the economy and the people they chase away, is that there is such high tax evasion in some places that, for example when I was living in Dainfern and Blair Atholl golf estates, numerous people boasted about how they were paying minimal or no tax at all. There is an absolute culture in South Africa of tax avoidance by many and that is something I will deal with in another blog article at another time.
Posted by Michael de Broglio on Friday 08-Dec-17
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Comments
Michelle said:
on Friday 12-Jan-18 07:32 AM
Yet again if the government control this in a more proper way, these types of things will not happen. I guess the people who get away with not paying taxes will suffer on a later stage (I hope). Equally is something we do not have in this country, but some things will never change.
Thabitha said:
on Monday 08-Jan-18 03:19 PM
I think its unfair for other people to pay and will others doesn't want to pay and again if tax money was used to create jobs or grow our economy then it was something.
Ashleigh said:
on Friday 15-Dec-17 09:31 AM
Tax is extremely important to pay to keep a country going but only when its being used for the right reasons and people can see that its going to the right things and can see a difference. Of course no one likes to pay for things that doesn't benefit themselves or their country. Why must we work hard a whole month, pay tax for a government that is throwing parties, building properties on their current properties, etc.... while we are dodging potholes to get to work. Not even I have the privilege of enjoying my own money that I worked extremely hard for.
Mathilda said:
on Thursday 14-Dec-17 11:11 AM
Everyone has to pay tax it’s just one of those things you have to accept and deal with,I can’t believe there are people who think they can just NOT pay tax and still want to complain about the state of our country ,but enough said if the Government can use the Tax payers money more efficiently we will maybe have more positive changes
Jadine E said:
on Thursday 14-Dec-17 07:12 AM
The money we earn and work so hard for is beneficial to government employees. More and More people will avoiding having to buy into property because of such reasons.
Henrietta said:
on Monday 11-Dec-17 03:04 PM
I agree with David on this one. We pay a fortune on taxes and gets nothing out of it. The transfer duties alone is already so expensive that its delaying people to buy houses. Just the other day my husband's grandma complained about the fact that they are paying taxes on a house which they brought 31 years ago for way less than what they are paying taxes on today. No one want to use government hospitals because of the state they in but we pay for it what a waste. Then you hear they spend an enormous amount on Mandela's funeral, not to mention Nkandla it's no wonder some people are dishonest about paying taxes.
Jadine Richards said:
on Monday 11-Dec-17 11:05 AM
So is this a case of "increase the Governments Coffers in order for them to steal more money from us"? Or is it a case of over-tax the hard working people so that the lazy grant recipients can have more increases? Again, I am not in favor of a country penalizing the small % of hard working individuals!
Angelique P said:
on Monday 11-Dec-17 10:28 AM
I know that there are so many people that avoid paying tax. It irritates me so much! Why must we pay tax and some people can get away with it. Tax sound so interesting and I would love to learn more about it. Maybe this vacation I will buy a book to educate myself in this field.
Jolene said:
on Monday 11-Dec-17 09:49 AM
I have to agree with David on this one, some people don’t want to pay their taxes because it is being stolen and wasted by our government, but that is unfortunately our reality and I don’t think it is fair for some to pay and others to just simply ignore it.
Angelique Jurgens said:
on Friday 08-Dec-17 02:56 PM
People must be careful... when you on SARS radar they are literally like a rash. This is how the rich stay rich... evade their taxes. Like I said in previous blog post - Greed is all it is. On the other hand wealthy people are not stupid - giving away their hard earned money so that a mockery of a government can throw it down the toilet or in the nightclubs of Sandton.
Natasha said:
on Friday 08-Dec-17 12:08 PM
Its so unfair that there is people that actually don't pay tax to think that we all have to pay tax and where is our tax money going to he government so that they can drive fancy cars and own mansions and here are we paying tax and trying to make a living.
Nina said:
on Friday 08-Dec-17 08:48 AM
I honestly can't think of a way to increase tax without there being one or the other issue. This will always be an uphill battle. I agree with Bianca that it is unacceptable to avoid tax. You honestly can't complain about anything if you decide that you will not pay your taxes according to law. Nobody likes paying taxes, and I agree that it seems like the money isn't going anywhere, but unfortunately that is the way things work. It is like complaining about the state of our country, but then you decide not to vote.
Bianca R said:
on Friday 08-Dec-17 08:36 AM
I have no clue how anyone can simply not pay tax or refuse to pay what they may owe to SARS, how can you think that is acceptable or feel good about yourself, knowing that you are in essence stealing and hampering the economy of your country. We all have to pay tax, willingly or not, it must be paid and it really is one of those things that you just accept and carry on. Just like David says, we pay for all of the public services and still have additional cover, but we pay regardless....
Jessica Apfel said:
on Friday 08-Dec-17 07:53 AM
Most aren't sble to purchase property because of the expenses associated with it, to increase trnasfer duty will only mean that people are even less reluctant to purchase / sell. The Davis Committee will hopefully facilitate transparency. It has been stated that one of the primary concerns of this committee is company contribution by way of taxes to the fiscus; 'Tax contribution by corporates will certainly be an important source of perspective on this issue.' This clrealy demonstrates the shift from targeting individually wealthy persons to wealthier corporates and companies.
david said:
on Friday 08-Dec-17 07:08 AM
i suppose if our tax money wasn't stolen or wasted people, would be happier to pay. i pay for a police force, but have to employ private security, pay for health care, but have to have medical aid, pay for an education system, but have to send my kids to private schools etc etc etc. I pay a fortune in tax, and get nothing for it.
Johannesburg based attorney specializing in personal injury matters including Road Accident Fund claims and medical negligence matters. My interests include golf, reading and the internet and the way it is constantly developing. I have a passion for life and a desire for less stress!