Time to introduce wealth tax is now

Mmegi Editor | Friday April 9, 2021 15:02

With Botswana considered amongst countries with the worst inequality levels the world over, analysts have said the recent increase in VAT to 14%, as well as a higher fuel levy, electricity tariffs and the new sugar and carbon taxes, will only increase inequality in the country.

The situation has sparked and intensified the debate around the introduction of a wealth tax to help relieve the burden on ordinary Batswana who are struggling to make ends meet amidst the upsurge in living costs.

A wealth tax is imposed on an individual’s net wealth, or the market value of their total owned assets minus liabilities.

While many countries are hesitant to introduce wealth tax, we believe this is the right time  for the country to look at this route to address this disruption.

First, we all are in agreement that inequality is unreal and out of hand in the country. The wealthy are getting wealthier and the poor keep losing it.

Although it is difficult to bridge the large gap between the poor and rich, the wealth tax will probably cushion the poor.

Apart from addressing inequalities, the wealth tax can also increase government revenue, add to economic growth, encourage investment, for example, by coercing the productive use of assets and can have other positive social effects.

These are some of the benefits that government should look at and consider positively to introduce the wealth tax.

To think that all Batswana enjoy the same benefits of free access to health and education services, it is only fair to have the rich paying something in relation to their assets or else things will get worse for the poor.

Surprisingly, while government has increased taxes and is aware of the devastating effects of COVID-19 on its people, it has not come up with measures to cushion its ordinary citizens.

Given the situation, it is time for government to think outside the box and come up with initiatives meant to uplift the livelihoods of ordinary Batswana such as the wealth tax. Otherwise one day the poor will rebel against the super wealthy.

Today’s thought

“No matter how bad a child is, he is still good for tax deduction”

-  Anonymous