Cape Town - Finance Minister Enoch Godongwana has ruled out tax exemptions for certain categories of civil servants such as healthcare workers and police officers.
“The law does not allow for such exemptions in line with the principle that all residents earning an income, be they the president, a worker or a businessperson, are subject to our tax laws without exception,” Godongwana said.
He was responding to parliamentary questions from NFP-MP Munzoor Shaik-Emam when he asked whether he would consider an exemption from pay-as-you-earn tax for healthcare workers up to a certain level.
He also asked whether the minister would consider exempting police officers as they were “poorly paid” with limited benefits, received low danger allowances, (often) lived in informal settlements and were at high risk.
Godongwana said government recognized that healthcare worker were significant in ensuring the provision of efficient and adequate health services to the public, and in the provision of healthcare as a basic human right.
It was the same with the role played by the police who ensured public order and the safety and security of citizens.
Godongwana said the provision of safety and security as well as the provision of public healthcare services were a public good funded by the government with the funds raised through taxes.
He added that taxation was a crucial mechanism to generate revenue as part of the country's flagship fiscal policy.
“One of the linchpins of a good tax system is the principle of equity, which incorporates the concept of horizontal equity.
“Horizontal equity ensures that all taxpayers who receive employment or other income are taxed the same based on their ability to pay, irrespective of their vocation.
“Low-income taxpayers earning below R91 250 are also exempt from Personal Income Tax,” he said.
Godongwana added that the South African personal income tax system was progressive in nature, and therefore the exemption of a group of taxpayers based on their profession would be impractical and against the principles of a good tax system.
“Marginal tax rates that increase with income and rebates that apply equally to all taxpayers, are the main tools to give expression to society’s preference to give relief for lower incomes through the tax system.
“Lastly, it will impede the fiscus as it will negatively impact the ability to raise sufficient revenue to fund government social programmes,” he said.
Cape Times