Why is National Treasury so scared to tax wealth in South Africa, the most unequal country in the world?

The document argues that South Africa's National Treasury is incorrectly relying on austerity and claims of high statutory tax rates to justify limited public spending. It suggests that the government can increase revenue by implementing wealth taxes, recouping illicit financial flows, and reducing tax expenditures for high-income individuals and corporations. It specifically highlights the gap between statutory and effective tax rates for companies and the potential for the Government Employees Pension Fund (GEPF) to lower borrowing costs.

• The National Treasury has adopted an austerity-based approach to public finances, claiming that the public purse has shrunk and that the only viable solution is to limit expenditure growth and cut frontline service delivery.
• There is a significant discrepancy between statutory corporate tax rates and effective rates; while the statutory rate is 27% or 28%, the Parliamentary Budget Office found the effective tax rate for medium and large companies was 18.2% in 2017.
• Substantial revenue is lost through tax expenditures and illicit flows, including R135 billion in tax breaks for individuals and an estimated US$40.4 billion lost to trade misinvoicing by corporations in 2017.
• The Government Employees Pension Fund (GEPF), with assets of R2.3 trillion as of 2024, could be used to lower government borrowing costs by investing in bonds at concessional rates.
• The document proposes several untapped revenue-raising alternatives, including a tax on wealth, taxes on the speculative trading of financial instruments, and the removal of tax breaks for those earning over R750,000 per year.

APA

Institute for Economic Justice (2025). Why is National Treasury so scared to tax wealth in South Africa, the most unequal country in the world? https://iej.org.za/wp-content/uploads/2026/02/Concept-note-for-MTBPS-SMWX-episode-Wealth-Tax.pdf

Chicago

Institute for Economic Justice. Why is National Treasury so scared to tax wealth in South Africa, the most unequal country in the world? 2025. https://iej.org.za/wp-content/uploads/2026/02/Concept-note-for-MTBPS-SMWX-episode-Wealth-Tax.pdf.

Wikipedia

{{cite report |author=Institute for Economic Justice |title=Why is National Treasury so scared to tax wealth in South Africa, the most unequal country in the world? |date=17 October 2025 |url=https://iej.org.za/wp-content/uploads/2026/02/Concept-note-for-MTBPS-SMWX-episode-Wealth-Tax.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{instituteforeconomicjustice2025why, author = {{Institute for Economic Justice}}, title = {{Why is National Treasury so scared to tax wealth in South Africa, the most unequal country in the world?}}, institution = {Institute for Economic Justice}, year = {2025}, month = oct, url = {https://iej.org.za/wp-content/uploads/2026/02/Concept-note-for-MTBPS-SMWX-episode-Wealth-Tax.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }