Image: GCIS

Finance minister Tito Mboweni told selected clients of two of the country’s biggest banks that national treasury has no plans to boost income tax, corporate tax or VAT even as the coronavirus decimates the nation’s finances.

Treasury is discussing the possibility of an inheritance tax and a so-called solidarity tax in a bid to raise additional finances, said two people who listened to the calls with hundreds of clients of Standard Bank and Absa.

Mboweni’s room to raise levies for individuals and companies is limited, with the ratio of tax revenue to GDP at 26% compared to a global average of 15%, according to World Bank data.

Lower levy

In South Africa, the top income tax rate is 45%, corporate tax is 28% and VAT is 15%.

In February, when the annual budget was released, treasury said it decided not to raise taxes due to the weakness of the economy and was considering lowering the levy on companies to boost the country’s competitiveness as an investment destination among emerging markets.