South Africa’s economy is heading towards collapse, as unemployment rises, the tax base stagnates and more people have to rely on the state for survival.
This was the warning that came out of a panel discussion on the first day of the 2022 Tax Indaba, during which economists expressed their doubts that the economy was on the path to meaningful growth, given its unsustainable structure.
Eunomix chief executive Claude Baissac noted that, relative to the size of the economy, the country had a very fast-growing population. Meanwhile, employment had remained flat and the number of people needing social grants had trended upwards.
The economy, Baissac said, was in an unsustainable position.
This was made worse by the fact that the tax base was not growing at a pace that matched population growth. Although there was taxable activity happening, FNB economist Siphamandla Mkhwanazi said, it was not being reported.
Mamiky Leolo, a senior official at the South African Revenue Service, said growth in the number of registered individual taxpayers had slowed over the past five years. “We are growing but not as vigorously as we were in the past.”
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Sarah Smit
Sarah Smit is a general news reporter at the Mail & Guardian. She covers topics relating to labour, corruption and the law.
