Question NW1432 to the Minister of Finance
29 May 2023 - NW1432
Shaik Emam, Mr AM to ask the Minister of Finance
Whether, given the fact that police officers in the Republic are poorly paid with limited benefits, low danger allowance, live in informal settlements and are at high risk, he will consider exempting all police officers from paying income tax; if not, what is the position in this regard; if so, by what date?
Reply:
No, as 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. We recognise role played by the police is significant in ensuring public order, as well in ensuring the safety and security of citizens as a basic human right. The provision of safety and security as a public good that is funded by Government and such funds are raised through the levying of taxes.
The levying of taxation is a crucial mechanism utilised to generate revenue as part of 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.
Based on the fact that the South African personal income tax system is progressive in nature, the exemption of a group of taxpayers based on their profession would be impractical and go 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.