Municipalities call for third Tax Tier to benefit them

The South African Local Government Association (SALGA) has stated that it is time for “the third tier of government” to participate in the tax regime.

According to a report by the Sunday Times, the association – which consists of SA’s 257 municipalities – wants to introduce a local government tax. The report stated this will likely be in the form of a business tax. One of the proposed options is the introduction of a new tax. Another option put forward was the allocation of a percentage of existing taxes levied by national government.

Alan Mukoki, CEO of the South African Chamber of Commerce and Industry, said the proposals would lead to job cuts if carried out. The report follows economist Dawie Roodt stating that higher taxes in South Africa were part of a ravenous state that continues to parasitise the productive sector. Roodt added that a tax revolt may be next, while other commenters said wealthy South Africans will leave the country if put under more financial pressure.

Finance Minister Pravin Gordhan recently announced an increase in income tax for certain individual, along with a hike in the fuel levy, excise duties for alcohol and tobacco, and the dividend withholding tax rate.

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