Wealth Tax
THE ROLE OF NET WEALTH TAXES IN PROMOTING EQUALITY AND FINANCING THE SDGS
South Centre Statement to ECOSOC Special Meeting on International Cooperation in Tax Matters
18th March 2024
The South Centre, an intergovernmental think tank of developing countries with 55 Member States from Asia, Africa and Latin America and the Caribbean, is pleased to share its views on the role of net wealth taxes in promoting equality and financing the SDGs.
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Implementing wealth tax and wealth redistribution in Sub-Saharan Africa
By Khanyisa Mbalati
Sub-Saharan Africa is one of the most unequal places in the world, with significant levels of social, gender, and income inequality. Several countries in the region have a tax structure that is heavily weighted towards consumption taxes, which can be regressive and inflict a significant burden on those with low and middle incomes. Implementing progressive tax systems, whereby those with higher earnings pay a larger share in taxes, is one way through which governments might optimize the impact of tax revenue on reducing inequality. The adoption of a wealth tax may facilitate wealth redistribution in Sub-Saharan African nations and could help bridge the inequality gap in the region. High statutory wealth tax rates of between 5-8% are needed in order to have an effective tax rate of 3-5%.
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