South Africa is in need of redistribution and growth. Every year we hear about how the country does not have enough money for schools, clinics and hospitals, and how the rich are overtaxed. There are extreme contradictions in how people experience and live in this country that show that increasing taxes on the rich is not only necessary but possible.
In this Fair Tax Monitor report the Alternative Information and Development Centre (AIDC) argues that it is crucial to enhance the progressivity of the tax framework and increase taxes to raise more revenue that can contribute to expanding social spending and investing in the transition to a low-carbon economy.
However, taxation is not simply about raising more revenue; fundamentally, the tax system must contribute to reducing inequalities. In the South African context, given how the concentration of wealth has increased in post-Apartheid South Africa and how most of this wealth has been accumulated through the inhumane system of Apartheid, there are both economic and moral imperatives to redistribute wealth from the rich to the poor.
Background
The Alternative Information and Development Centre (AIDC) has produced a significant amount of analysis on South Africa’s tax system, with a particular focus on personal income taxation and corporate tax evasion. This work has continued in line with the key objectives of maximising public revenues while combating inequality and unemployment.
In 2024, it began working on a South African report using the Fair Tax Monitor research methodology, seeing this as an opportunity to update and consolidate past analysis, while expanding research into other areas of the tax system. The ultimate objective is to provide a wide-ranging report on all possible options for reforming the tax system towards greater revenue mobilization and fairness, in the context of South Africa’s intensifying triple crisis of unemployment, poverty, and inequality.
This report was produced as a part of the From the Ground project, funded by the Ministry for Foreign Affairs of Finland. From the Ground is implemented by the Alternative Information & Development Centre (AIDC), the Centre for Research on Multinational Corporations (SOMO), Centre for Democracy and Development (CDD), Oxfam Mozambique, Oxfam in Kenya, and Oxfam Novib. Research was guided by the Fair Tax Monitor framework, developed by Oxfam Novib and Tax Justice Network Africa.
ENDS
See here an article from March 2025 “A preview of the South Africa FTM: How the Treasury is forfeiting R198bn a year due to tax bracket over-inflation” which highlighted some of the early findings as the report was in development.