Graduate tax : a South African study on proposed legislation, implementation and public perception

Abstract

Graduate tax is a concept that was only recently introduced into the public discourse in South Africa. Little is known about how it will be implemented and who will be liable to pay such a tax. The purpose of this study is to examine the proposed introduction of graduate tax for South African tertiary education graduates and the public perception of such a tax. To achieve the objectives of the study, relevant literature was reviewed that explained the concept of a graduate tax and the possible advantages and disadvantages of its imposition. Data collected by means of a questionnaire was analysed, which revealed the public perception of a graduate tax as well as its possible consequences.

The analysis of the data collected indicated that graduate tax is perceived as an additional tax to be paid by graduates from tertiary institutions, whereas the literature defined it as a tax paid by tertiary institution graduates who received their tertiary education at no cost. Furthermore, it was found that the imposition of a graduate tax may deter some from pursuing a tertiary degree in order to avoid liability for such tax. The imposition of a graduate tax could also lead to an outflow of skills, as graduates would be likely to seek employment outside South Africa in order to avoid paying graduate tax.

It is recommended in this study that more clarity should be given to the public as to what this proposed graduate tax would entail and who would be affected by it.