Wealth tax warning from Zuma party

A party backed by former South African President Jacob Zuma said it expects to be in government after May 29 elections, and that it plans to raise additional state revenue by increasing capital gains and inheritance taxes once in office.

The uMkhonto weSizwe Party, or MKP, has emerged as the wildcard in the election since Zuma threw its weight behind it in December last year.

With opinion polls showing it is set to win between 8% and 13% of the vote, it is unlikely to realize its ambitions of taking power nationally, but it could still be a key power broker in parliament and in Zuma’s home province of KwaZulu-Natal.

“With us the emphasis is taxation, maybe more on capital income than on labor income,” Thanti Mthanti, the MKP’s economic policy expert, said in an interview at Bloomberg’s Johannesburg office on Monday. The party also plans to review some property tax deductions, he said.

The MKP’s other previously announced policy priorities include the nationalization of the central bank and commercial lenders, and the expropriation of land without compensation. Its election platform is similar to that of the leftist Economic Freedom Fighters, which MKP sees as a potential coalition partner.

Mthanti dismissed allegations and widespread reports that Zuma’s almost nine-year tenure was marred by mismanagement and stagnation, saying the economy has slowed and power cuts had worsened since he left office.

He also rejected a judicial commission’s findings that Zuma had aided and abetted the looting of taxpayer funds, saying he hadn’t been convicted of anything.

Nhlamulo Ndhlela, the MKP’s spokesman, re-iterated that the 82-year-old Zuma remains fit enough to hold office and described reports that his health is failing as false.

On May 10, the Constitutional Court will hear an appeal filed by the nation’s electoral commission disputing Zuma’s eligibility to stand as a lawmaker in the election because he has a criminal conviction for refusing to testify before the judicial graft inquiry.

The MKP has recently been dogged by internal divisions. Over the weekend, it expelled several senior members, including co-founder Jabulani Khumalo, who registered the party in September 2023.

There is no risk of Khumalo deregistering the party, as it subsequently been re-registered under Zuma’s name, Ndhlela said.