HomeHome SearchSearch MenuMenu Our productsOur products

'Wealth Tax' is still on the table. How could it affect you?

by , 26 February 2016
In his recent budget speech, Finance Minister Pravin Gordhan confirmed that a 'wealth tax' was under consideration through the Davis Committee.

Now, this shouldn't come as a surprise, as the idea has been thrown around for several months already, with much debate to accompany it.

Now that Mr. Gordhan has reared up the issue once again, you may be wondering a few things, such as 'what is it?', 'why wealth tax?', 'why the interest now?', 'how could it affect me?'.

Well, today I've got the answers for you...

Why wealth tax? Why the interest now?
It appears that the matter of wealth tax has been seriously taken into light after a recent visit by French economist, Thomas Piketty.
On his visit, he recommended a wealth tax framework which South Africa should implement in order to balance out what he sees as gross inequality throughout the country.
This proposed model would see the wealthy having to declare all of their assets, after which they will be levied annually.
Save your business from penalties by being an instant audit expert!
With penalties as high as 200%, you can't afford to stay in the dark about the auditing process. You need to know your rights, your responsibilities and obligations, and you need to know them before it's too late…
Click here to find out your rights

If this taxation was to be implemented, how would it affect you?
According to financial analyst, Stuart Theobald, in an interview with the Daily Maverick,
'If you have a business that owns a few petrol stations, say collectively worth R10-million, you will be subject to a tax on the value of that business. It doesn't matter if your business actually made a loss in that particular tax year – the tax will be levied irrespective. So if you do not have cash on hand, you will be required to either borrow against the value of your business or sell some of your business in order to settle the tax liability. Depending on how leveraged you are already, and if your business has had a bad year, you may well have no choice but to sell some of your business.'
In other words, even if your business is doing terribly in a year, you'll still be taxed, which could lead you into debt from borrowing to keep yourself afloat.

And if you can't even do that because you are in debt already, then you'll have no choice but to start sacrificing parts of your business.

In a nutshell, it could be very hard on you and your business…

*****MUST HAVE*****

How much time do you spend looking for useful tax information? Do you need all the South African taxes analysed and explained in one easy location?

Now you can have all the information in one place: The Practical Tax Loose Leaf Service.

Over 500 pages compiled by our tax experts, comprising of:

•        All the definitions and legal regulations, useful advice, exceptions to the rules that help you slip through the legislative jungle of taxes.

·         Case studies and practical examples that show you what elements you should consider for your taxes to be perfect.
·         Red flags you need to watch out for and the penalties you'll face if you don't respect them.
·         Sample templates at your disposal, ready to be filled in, customised and printed.
You will also get free access to the accountingandtaxclub.co.za. Here you'll find questions and answers on any tax and accounting issues. You can also ask our experts a tax question

Get your copy of the Practical Tax Loose Leaf Service now.
Many argue that the idea is nothing new, in that South Africa already has a 'wealth tax' in the form of capital gains tax, donations tax and estate duty.
So what can you do?
Should any changes in tax law, such as the one be mentioned above, occur, it'll be vital that you stay up to date with them.
That's why we have the continuously updated Practical Tax Loose Leaf Service!

This invaluable resource will help you understand in vivid detail, as well as manage, any tax issue, new or old, which this country has to offer.

So if you don't already have this asset, I recommend you click here to order yours today. 

Vote article

'Wealth Tax' is still on the table. How could it affect you?
Note: 5 of 1 vote

Related articles

Related articles

Related Products