Philanthropists give for many different reasons, but bequests could decline by about $7 billion a year.
The South African budget speech echoed the theme of rebuilding set out by President Cyril Ramaphosa in his state of the nation address.
The lost incentives to give are likely to make a bigger difference than the small uptick in economic growth expected from the new law.
More than US$20 billion per year in giving is potentially at stake.
Taxing inherited wealth doesn't just generate revenue for the government. It encourages philanthropy.
President Trump released details of his tax plan, which would essentially benefit the wealthiest Americans by repealing the estate tax and other changes at the expense of the middle class.