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South African Trade Unions Call For Wealth Tax

Monday, March 1, 2010

During a parliamentary committee meeting following the announcement of the South African 2010/11 budget, the Congress of South African Trade Unions (COSATU) proposed a wealth tax in order to raise revenue for alleviating poverty in the country.

Given the rapid rise in managerial salaries and the fall in real wages for other workers that it has seen in South Africa, COSATU said that the new tax should be imposed on those earning more than ZAR1m (USD130,000) per year. It suggested that a new income tax threshold should be introduced at that level.

In order to relieve the increasing inequality it sees, and the hardship experienced by the poorer elements in the country, it is also proposing that the range of goods zero-rated under value added tax should be extended. It said that there should be a further look at the rating of certain food products and other items, such as children’s clothes and educational items, to provide more assistance to those on lower incomes.

As an additional comment on the measures introduced in the budget, the People’s Budget Coalition, which is led by COSATU but also includes the South African Council of Churches, has pointed out that companies will continue to pay proportionately less tax than individuals.