The implementation of aggressive taxation policies by the South African government has a clear goal: To redress inequality by taking from the haves and giving to the have-nots. However, according to the chief economist at the Efficient Group, Dawie Roodt, this tactic isn’t working.Despite all of the redistribution, inequality is not coming down, he says. “Redistribution doesn’t actually help poor people to improve their financial positions or enable participation in the economy.
In fact, policymakers have become pretty hostile towards capital creation by subjecting it to a range of taxes, intermediary costs and regulatory charges. The medical tax credit, which is usually adjusted for inflation, was also left unchanged at R310 for the first two medical aid members.on behalf of yourself and your dependents. The main member, as well as the first dependant on the medical scheme, will receive a monthly tax credit of R310 . All additional dependants will receive a monthly tax credit of R209 .Assuming your gross income is growing less than the rate of inflation, you are actually earning less than the year before, says Butchart.
SA Reserve Bank stats also show that savings are in the dustbin. As a percentage of GDP, gross saving was at 14.0% in the final quarter of 2018 and averaged 14.4% for the year, the lowest annual number on record since the index began in 1990.
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