Despite being the most unequal country in the world, South Africa still has tax breaks that deepen inequality. In this briefing paper, we demonstrate how the retirement fund contribution deduction disproportionately benefits high-income earners.
We propose changing the tax deduction to a tax credit. This reform would significantly help working-class taxpayers save for retirement. The change to a credit would increase the amount low- and middle-income earners get back from SARS when they contribute to a retirement fund.
In addition, the reform would raise R23 billion in additional revenue per annum, providing a significant contribution to domestic resource mobilisation.
See the full briefing paper below.
