Speculation about the wealth tax could contribute to further emigration of the wealthy from South Africa
LONDON, April 28, 2021 / PRNewswire / – As many countries seek to recover from the economic aftermath of the pandemic, introducing a wealth tax has become an increasingly popular solution to addressing this problem. While some experts have concluded that a wealth tax could be a short-term tool for increasing revenue, many others have also highlighted the concerns associated with taxation. South Africa The youngest country has been rumored to be introducing a wealth tax. A recent study by the World Inequality Lab shows that the tax could be as high as 30% 160 billion rand (($ 10.7 billion). Likewise experts at the University of Witwatersrand in Johannesburg have proposed to introduce a progressive wealth tax for those earning above 3.6 million rand that is 354,000 high earners in the country. While there were no plans to collect the levy, the nation has continued to develop its high-net-worth individual taxpayer department.
The segment, announced during the household speech in February, aims to crack down on individuals who have failed to disclose their full income due to “complex financial arrangements”. The South African Revenue Service (SARS) has already started identifying wealthy citizens who fall under this category. Many expect to receive their first letter this month. Extensive studies have shown this South Africa The number of the affluent population continues to decline. Around 1,900 millionaires have left since the last number in 2020. According to New World Wealth’s Africa A total of 4,200 high net worth individuals have reportedly left the country over the past decade. With the possibility of higher taxes for the rich, that number is likely to rise.
“Applying more draconian tax laws to productive entrepreneurs is counterintuitive for the creation of a holistic economic development plan. This proposed move by SARS will create further distrust of the government and encourage more professionals to explore other countries that offer a fair and welcoming environment” , he says Micah Emmett, CEO of CS Global Partners and a dual qualified attorney with decades of investment migration experience. “Investors are looking for nations with better economic opportunities that will allow them to protect their assets in a politically and economically stable democracy.”
The Caribbean has become an ideal destination for South Africans who want to stay in a similar setting without the disadvantages of their home country. The region is responsible for pioneering the Citizenship by Investment program – an initiative that encourages foreign investors to contribute to a nation’s economy in exchange for citizenship and its benefits.
Dominica The Citizenship by Investment program is one such option. Launched in 1993, the program has been rated by an independent study as the world’s best second citizenship offer for four consecutive years. To qualify for citizenship, applicants must either invest in a government fund or buy into select real estate options. Only when a multi-stage review process has been passed are applicants granted citizenship. Benefits include visa-free travel or travel on arrival to over 140 countries and territories, the right to live, work, and study in the nation, and the ability to pass citizenship on to future generations.
Not only does the nation have strong governance that enables an environment rich in economic opportunity, but it is also one of the few countries in the world that is successfully handling the coronavirus outbreak. Dominica The vaccination program is also well underway, showing that the government is proactive and committed to the prosperity of its citizens.
SOURCE CS Global Partners