Minister of Finance Enoch Godongwana says the government is not considering introducing a wealth tax on South Africa’s richest citizens
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Minister of Finance Enoch Godongwana says the government is not considering introducing a wealth tax on South Africa’s richest citizens, saying the country already has several measures in place to tax wealth.
Godongwana said this in a written parliamentary reply after Economic Freedom Fighters (EFF) MP Carl Niehaus asked about measures to address inequality, including a wealth tax on the super-rich and the nationalisation of key strategic sectors.
Niehaus also asked what steps the government was taking to address the impact of rising fuel prices and broader cost-of-living pressures on working-class South Africans.
Godongwana said the government had responded to higher fuel prices by providing temporary fuel levy relief on petrol and diesel in 2026, at a cost of about R17.2 billion in lost revenue.
He said the government was also not discussing the nationalisation of key economic sectors, and instead supports a mixed economy where both the public and private sectors play a role in driving growth, investment and job creation.
"At the moment, Government is not discussing nationalising key sectors of the economy. South Africa's economic policy seeks to achieve inclusive growth, job creation and improved service delivery through a mixed economy in which both the public and private sectors play important roles," he said.
On wealth taxes, he said South Africa already has several instruments to tax wealth, including estate duty, donations tax, securities transfer tax, transfer duty and capital gains tax.
"The total annual tax revenue collected from the four national taxes on wealth, excluding local property taxes, amounted to R21.3 billion in 2024/25," he said.
Godongwana added that this represented 1.15% of total tax revenue, which he said compared favourably with the OECD average of 0.5% for similar taxes.
"International evidence shows that several countries abandoned or significantly reduced the scope of their wealth taxes over the years as they were ineffective – either in favour of inheritance tax/estate duty and others, or altogether. In 1990, twelve countries had a wealth tax while only four countries (Norway, Switzerland, Spain and Colombia) have what can be termed wealth taxes today.
"Reasons for abolishing wealth taxes include: the high cost of collection; administrative complexity; risk of capital flight; limited revenue gained from these taxes; and the negative impact of taxing wealth on economic growth".
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