RESOURCING FOR RIGHTS REALISATION ALTERNATIVES TO AUSTERITY

The Institute for Economic Justice argues that South Africa's National Treasury has unnecessarily cut social spending by failing to mobilize available resources. The brief identifies significant revenue potential through the removal of regressive tax breaks for high earners, the introduction of wealth and financial transaction taxes, and the utilization of the Gold and Foreign Exchange Contingency Reserve Account (GFECRA). It recommends restoring the Corporate Income Tax rate to 28% and implementing a progressive Social Security Tax to fund social protections.

• The South African government has failed to fulfill its constitutional and international legal obligations to raise the maximum available resources (MAR), leading to cuts of hundreds of billions of rands from essential social services over the last decade.
• Effective personal income tax rates have declined over several decades, and tax expenditures—particularly deductions for retirement and medical aid contributions—disproportionately benefit high-income earners.
• Corporate Income Tax (CIT) has been reduced from nearly 50% to 27%, which the document argues is unlikely to yield investment gains and has cost the fiscus R12 billion.
• South Africa under-taxes wealth and capital income compared to OECD and Latin American peers, with significant potential revenue available from a Net Wealth Tax (R70-R160 billion) and a Financial Transactions Tax (over R40 billion).
• The Gold and Foreign Exchange Contingency Reserve Account (GFECRA) contains a surplus of over R497 billion that could be used to support state-owned enterprises, capital expenditure, and social support.
• Illicit financial flows (IFFs) significantly undermine revenue; trade 'misinvoicing' alone is estimated to have deprived the government of US$2.1 billion in CIT annually between 2010 and 2014.
• The document advises against raising the general VAT rate due to its regressive nature and the failure of the 2018 increase to meet revenue projections, suggesting instead a 25% luxury VAT rate to raise approximately R9 billion.

APA

Institute for Economic Justice (2024). RESOURCING FOR RIGHTS REALISATION ALTERNATIVES TO AUSTERITY. https://iej.org.za/wp-content/uploads/2024/02/IEJ-policybrief-AlternativesToAusterity-feb2024.pdf

Chicago

Institute for Economic Justice. RESOURCING FOR RIGHTS REALISATION ALTERNATIVES TO AUSTERITY. 2024. https://iej.org.za/wp-content/uploads/2024/02/IEJ-policybrief-AlternativesToAusterity-feb2024.pdf.

Wikipedia

{{cite report |author=Institute for Economic Justice |title=RESOURCING FOR RIGHTS REALISATION ALTERNATIVES TO AUSTERITY |date=February 2024 |url=https://iej.org.za/wp-content/uploads/2024/02/IEJ-policybrief-AlternativesToAusterity-feb2024.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{instituteforeconomicjustice2024resourcing, author = {{Institute for Economic Justice}}, title = {{RESOURCING FOR RIGHTS REALISATION ALTERNATIVES TO AUSTERITY}}, institution = {Institute for Economic Justice}, year = {2024}, month = feb, url = {https://iej.org.za/wp-content/uploads/2024/02/IEJ-policybrief-AlternativesToAusterity-feb2024.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }