Graduate tax is a possible solution to education fee crisis

A GRADUATE tax was suggested as a way to help fund free higher education because wealth tax alone won’t solve the education fees crisis, said Judge Dennis Davis, chair of the Davis Tax Committee, at a panel discussion on whether wealth tax would make a difference to the government’s budget.

“There really isn’t money for free higher education [right now]. And there is even less money in the budget than last year because of the economic recession,” said Davis, who chaired the discussion, hosted by the Wits University School of Governance (WSG) on August 21st.

But what is wealth tax? Professor Imraan Valoodia, Wits’ dean of commerce, law and management, who was one of the panellists, explained, “Wealth is defined as all the things that you earn that are outside of your income. It’s the asset base that you have and the things that you own. So with wealth tax, you’re taxed on the holdings of those assets. So the more assets you hold, the more taxes you would pay.”

Wealth tax is not the sole solution to the higher education crises, Valoodia said. “There are good economic grounds for why there should be a graduate tax.”

“In my view, the essence of the fee problem is that you have people who need to pay fees now. If they pay fees and they graduate, then we are almost sure that they are going to earn much higher incomes. You can give someone money to pay fees now and collect the money back when they start earning incomes,” he said.

Professor Pundy Pillay, WSG research director, shared Valoodia’s sentiments that wealth tax should be one of the avenues. “We are not achieving what we need to in education and health to address issues of inequality,” said Pillay.

Personal income tax is the biggest source of tax revenue for the government, according to National Treasury’s 2017 Budget Highlights. “Growing the economy by 5% or hiking tax at 5% from about 1.5-million tax payers, we would have about an extra R50 billion in the kitty to spend and start dealing with the issues of higher education,” said Davis.

Justin Logie, a master’s student in accounting who attended the event, said he didn’t think a wealth tax was the best way to fund higher education. “The best thing is to have some kind of contribution that is then tax deductible,” he said. “So companies make a contribution and then for that contribution they get a tax refund.”

“You don’t want the effective tax rates on companies to go higher because then they just go overseas. And you need to keep companies within the country in order to make sure that they continue to employ people,” said Logie.

Davis concluded that, “all people in South Africa should be responsible for this country and its development. We need a government that delivers on equality to reconstruct our society.”



Wits senior staff tap out

Thuletho Zwane and Dineo Bendile

The sudden resignation by yet another dean has left Wits staff and students reeling. Questions are now being asked about what is going on: are they real resignations or have they been pushed?

Dean of Commerce, Law and Management Prof Nqosa Mahao’s abrupt resignation on Tuesday left some staff members “puzzled”.Academic Staff Association of Wits University president, Prof David Dickinson, said there were rumours regarding the departure of Mahao and said “the notice issued yesterday [on Tuesday] comes without warning and will therefore inevitably disrupt the smooth running of the faculty.”

Members of the student community expressed concern at the high turnover of senior staff members at the university recently – within the last month. Mahao’s resignation follows the recent resignation of the director of the Wits Business School, Prof Wendy Ngoma, who resigned in August.

[pullquote]”I don’t want to say racism is an issue, the VC [Habib] could be trying to remedy those issues, but it seems suspect that all the deans that have been dealt with are black.”[/pullquote]


More resignations
Director of Transformation, Nazeema Mohamed, resigned last month and the dean of students, Prem Coopoo, has been placed on special leave with no indication of when she will return. No official reasons have been given.
The Dean of Health Sciences Professor Ahmed Wadee left his post after being “recalled” by the National Health Laboratory Service (NHLS). It is believed that Wadee has been suspended.
SRC President Sibulele Mgudlwa said it was still too early for the new vice chancellor, Prof Adam Habib, to be restructuring senior posts.  Habib has been in office for less than 200 days – two months officially and five months unofficially.“You can’t be talking about performance if you haven’t sat down the dean and said ‘these are the performance targets I expect from you, I am giving you until December to implement those changes,’” Mgudlwa said.


Concerns around the Vice Chancellor’s “vision”
He added that the reshuffling could be Habib’s way of asserting his new-found power.  He felt that even though poor performance, instability and the high turnover of staff could have contributed to Mahao’s resignation, Mgudlwa claimed there was a racial pattern regarding the resignations. “I don’t want to say racism is an issue, the VC [Habib] could be trying to remedy those issues, but it seems suspect that all the deans that have been dealt with are black,” Mgudlwa said.
In an email to Wits Vuvuzela, Habib dismissed these claims and said “none of my decisions are made on the basis of race”. He added that “some of the appointments currently being made are of black and/or African staff.” Habib said he was paid to implement the vision and plans of the university.“If I cannot make firm decisions after five months of engagements, then I am not up to doing the job.”




Wits Vuvuzela. Exclusive: Wits loses another Dean. September 17, 2013

Wits Vuvuzela. No answers on Coopoo September 13, 2013

Wits Vuvuzela. Wits Business School journey back to #1. August 28, 2013