JOHANNESBURG – South African Finance Minister Tito Mboweni told selected clients of two of the country’s biggest banks that the National Treasury has no plans to boost income, corporate or value-added tax even as the coronavirus decimates the nation’s finances.
The Treasury is discussing the possibility of an inheritance tax and a so-called solidarity tax in a bid to raise additional finances, two people who listened to the calls with hundreds of clients of Standard Bank Group Ltd. and Absa Group Ltd. said. They asked not to be identified because the calls were private.
Mboweni’s room to raise levies for individuals and companies is limited, with the ratio of tax revenue to gross domestic product at 26% compared to a global average of 15%, according to World Bank data. Increasing value-added tax, which the government has done only twice since 1991, is unpopular within the ruling African National Congress because it is seen as affecting the country’s poorest people hardest. Taxes on the wealthy are favored politically and a solidarity tax, associated with the virus outbreak, would be limited in duration.