Wealth tax won't raise enough for BIG - but VAT, income tax hike may, says Treasury's Momoniat

[rvZA]

A wealth tax won't be able to raise enough revenue to potentially fund a basic income grant (BIG) in the same way an increase in VAT or personal income tax (PIT) could, says Treasury's acting director-general Ismail Momoniat.

Momoniat was speaking at the Tax Indaba hosted virtually by the South African Institute of Taxation on Wednesday.

He weighed in on various tax matters – whether it be raising revenue or dealing with issues like climate change and health.

Momoniat also noted that taxes would have to be adjusted to make way for the changing energy landscape, a challenge many countries face. He noted new UK Prime Minister Liz Truss' goals to cap energy bills (amid rising gas prices) while also lowering taxes.

"She sounds to me like a great magician if she achieves that. She will probably need a Nobel prize. But I have my doubts," he quipped.

Wealth tax won't raise enough for BIG - but VAT, income tax hike may, says Treasury's Momoniat | Business

A wealth tax won't be effective in raising the revenue the same way VAT or personal income tax can, says Treasury's acting director-general Ismail Momoniat.

www.news24.com

 

[rvZA]

I am all for this. Implement a wealth tax, raise VAT as well as personal income tax. Let's see how the Laffer curve smack you uneducated fools right out of the pool.

 

[Spacerat]

I am all for this. Implement a wealth tax, raise VAT as well as personal income tax. Let's see how the Laffer curve smack you uneducated fools right out of the pool.

VAT increase means everybody contributes.

 

[rvZA]

VAT increase means everybody contributes.

Yes, I know. If they want more money that is where they will have to go. Individual tax payers are not going to cut it. And, over and above this, in today's struggling economy, even if raising VAT by 1%, the majority of tax payers, and probably any other person, will be cutting even more on buying certain things. 1%, 5%, 10%, even a 50% VAT increase may not equate to them getting more taxes. The increase in any sort of tax today will have the exact opposite effect.

 

[Cosmik Debris]

VAT increase means everybody contributes.

It also means that we use tax to generate tax. You cannot tax a country into prosperity. You cannot welfare a country into prosperity. And you cannot make the poor rich by making the rich poor.

 

[TelkomUseless]

It also means that we use tax to generate tax. You cannot tax a country into prosperity. You cannot welfare a country into prosperity. And you cannot make the poor rich by making the rich poor.

ANC doesn't believe in this.... they will show the world!!!

 

[Oldfut]

ANC doesn't believe in this.... they will show the world!!!

The ANC leaders have no intention of doing anything to make the country prosper. They are in it for themselves, their family and their friends. End of.

 

[BuckRogers]

It is a classic catch 22. More taxes can Only be collected by growing the economy. But the economy cannot grow under ANC policies.

 

[NarrowBandFtw]

VAT increase means everybody contributes.

this is why I'd love to see ALL tax abolished ... and replaced entirely with VAT only, make it as high as needed

the revolution will follow soon after

 

[Major Boredom]

VAT increase means everybody contributes.

Go read up on the Laffer Curve

Laffer Curve: History and Critique

The Laffer Curve displays the relationship between tax rates and tax revenue collected by governments.

www.investopedia.com

rvZA has a very valid point and I have seen some commentators actually theorising we are past the critical point allready.

 

[Blackhand]

It also means that we use tax to generate tax. You cannot tax a country into prosperity. You cannot welfare a country into prosperity. And you cannot make the poor rich by making the rich poor.

100% agree. However, making things better for the people is not the goal.
Making things better for the politicians while making people think they are doing something for them is the goal.

It's the exactly the same ploy with EWC. They convince people that taking away one of their constitutional rights is somehow for their benefit, but it's just about concentrating money and power in the hands of the politicians.

 

[ToxicBunny]

Go read up on the Laffer Curve

Laffer Curve: History and Critique

The Laffer Curve displays the relationship between tax rates and tax revenue collected by governments.

www.investopedia.com

rvZA has a very valid point and I have seen some commentators actually theorising we are past the critical point allready.

For once rvZA is largely on the money, and we are beyond the point of diminishing returns... I remember the government raising taxes and boldly claiming they'll rake in X many billions extra, and then at the end of that tax year they missed their projections by quite a margin.

 

[VooDooC]

“You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving."

 

[supersunbird]

For once rvZA is largely on the money, and we are beyond the point of diminishing returns... I remember the government raising taxes and boldly claiming they'll rake in X many billions extra, and then at the end of that tax year they missed their projections by quite a margin.

My brain is struggling with this paradigm shift.

 

[ToxicBunny]

My brain is struggling with this paradigm shift.

Trust me, so am I... there is a BSOD element going on in my neurons.

 

[Mista_Mobsta]

For once rvZA is largely on the money, and we are beyond the point of diminishing returns... I remember the government raising taxes and boldly claiming they'll rake in X many billions extra, and then at the end of that tax year they missed their projections by quite a margin.

SA is in for a very big shock during the next couple of tax seasons. SA was lucky during the post-COVID period to receive bumper revenue from the minerals and resources arena, mainly due to the insane price growth during COVID of certain metals. The current global inflationary environment is pushing stagflation/recession onto various economies and with China grappling with their own growth and banking woes, SARS will struggle to narrow the budget shortfall.

I have said it many times before - corruption is one the most devastating events to happen to SA since apartheid! SARS and Govt should focus more on ensuring the tax money is spent with the highest utility in mind and not look at ensuring BBBEE targets are met regarding tenders. Unfortunately, the greed of man is the ultimate reason that SA is in the state it is right now.

Tenderpreneurs are more prevalent than we can imagine!

 

[Cosmik Debris]

this is why I'd love to see ALL tax abolished ... and replaced entirely with VAT only, make it as high as needed

the revolution will follow soon after

VAT at 50% will mean a SASSA pensioner will have to feed, clothe and pay for essentials with R945 per month. I suppose you can survive on that?

 

[ToxicBunny]

SA is in for a very big shock during the next couple of tax seasons. SA was lucky during the post-COVID period to receive bumper revenue from the minerals and resources arena, mainly due to the insane price growth during COVID of certain metals. The current global inflationary environment is pushing stagflation/recession onto various economies and with China grappling with their own growth and banking woes, SARS will struggle to narrow the budget shortfall.

I have said it many times before - corruption is one the most devastating events to happen to SA since apartheid! SARS and Govt should focus more on ensuring the tax money is spent with the highest utility in mind and not look at ensuring BBBEE targets are met regarding tenders. Unfortunately, the greed of man is the ultimate reason that SA is in the state it is right now.

Tenderpreneurs are more prevalent than we can imagine!

I fully agree with your point of view, but we all know that the ANC is unable to punt that sort of idea purely because to focus on spending efficiency is a multi-year process whereas forcing BBEEEE targets is a quick and dirty populist thing so they will take that route instead.

 

[rh1]

VAT increase, check. Wealth Increase, check. National Health Insurance, check. Income Tax increase, check.

Yep, middle class is f@$k.

 

[Mista_Mobsta]

I fully agree with your point of view, but we all know that the ANC is unable to punt that sort of idea purely because to focus on spending efficiency is a multi-year process whereas forcing BBEEEE targets is a quick and dirty populist thing so they will take that route instead.

The problem in SA is perfectly enshrined in the following link: https://www.news24.com/news24/south...n-the-day-of-babita-deokarans-murder-20220908

The rot is seemingly so endemic and entrenched in the governmental worker sector, that a person which doesn't engage in corrupt activities, is applauded!