South Africans have reached tipping point with corruption, expert warns

Finance Minister Malusi Gigaba has warned that those considering a tax boycott will not get away with it … and the government has the power to jail you.

Following his medium-term budget statement that South Africa faces a R50.8 billion revenue shortfall, Gigaba said yesterday he does not expect a tax revolt.

But he sent a clear message to would-be defaulters and boycotters, promising that government would “revolt” against those not paying taxes.

Any questions about a tax boycott “showed a pessimistic attitude towards the economy”, he said.

Frustration at government through a tax revolt – while unlikely – has the potential to cripple the country and bring transgressors heavy penalties, including imprisonment.

Those opting for such a revolt will find themselves in hot water with the South African Revenue Service (Sars) which, under the Tax Administration Act 28 of 2011, can initiate monetary penalties against noncompliant citizens.

And according to financial pundits, the taxman has systems in place for collections. Tertius Troost, a tax consultant, said there have been reports of people not paying tax to Sars, but into a trust account, where the money would be used to “hold government to ransom”, unless corruptions comes to an end.

“How can people do such a thing? As soon as people start doing this, Sars will penalise you.”

Troost said a revolt aims at draining money out of the fiscus. Government would feel the pinch first, rather than citizens.

“A government without money can’t run a country.

“One of biggest forms of money to be paid [by Treasury] is the public sector wage bill [for civil servants].”

Not paying tax “shuts down the entire country and we don’t want to be in that position”, he added.

“But people want proper services and to stop corruption.” For a revolt to work, the buy-in must be huge, Troost said.

“It takes a lot of people to buy into the idea. I am not saying it can’t happen, but it’s unlikely.”

But political economy analyst Zamikhaya Maseti warned that South Africans should not be underestimated.

They had reached a tipping point when it came to rampant corruption and state capture. Gigaba was wrong to say people were “pessimistic”.

“South Africans have been revolting against state capture. We have seen marches organised and people have had enough.

“We are on the brink of a mafia state,” Maseti said.

But he pointed out that “there is no way” people can revolt against taxation because there are penalties.

“The Sars system is tight. Sars is still intact, despite the problems we have seen. It’s still in good shape. “But whether they are meeting their targets, I am not sure,” said Maseti.

The Tax Administration Act lists a number of methods to penalise taxpayers who do not comply.

“An individual can be penalised, dependent on the size of his or her taxable income, from R250 to R16 000 per month if a tax return is outstanding,” said Troost.

“Furthermore, a company may be levied a 10% penalty of the amount of tax due if it doesn’t pay their provisional taxes timeously.

“Apart from the monetary penalties, noncompliance with the Tax Act may, in certain circumstances, result in the taxpayer being found guilty of an offence and be subject to imprisonment for a period not exceeding two years.” – yadhanaj@citizen.co.za

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