Enoch Godongwana, South Africa’s Finance Minister, claims that the country can afford an R350 Basic Income Grant. As long as the ruling party reduces its social spending.
Godongwana announced the introduction of a Basic Income Grant at the conclusion of the ANC’s Policy Conference.
“The fiscus can afford to do so at a cost. That means we’ll have to cut a number of social spending somewhere to fund it,” Finance Minister Enoch Godongwana says a Basic Income Grant is on the cards.
The grant will most likely be funded through the wealth tax, which was one of the main topics of discussion at the weekend conference.
The ANC will request that SARS investigate the implementation of a wealth tax on the country’s wealthiest 5%.
“Majority of the wealth in country is in the hands of 5% of the population. That is not right,” Chair of the ANC’s economic transformation subcommittee, Mmamoloko Kubayi.
Many experts, however, believe that imposing a wealth tax will drive the country’s wealthy individuals to relocate to countries with lower taxes.
A renewed emphasis on wealthy taxpayers poses a serious long-term threat to the tax system’s stability.
Treasury proposed the wealth tax in 2021, stating that SARS would work on additional data collection on the country’s wealthiest citizens.
According to Godongwana, if the plan is implemented, grants will exceed R1 trillion within three years.