SA tax revolt threat is ‘real’, but experts say this is not the way to go

The collapse in basic services has sparked a tax revolt debate as public health becomes a shambles, sewage runs into water sources and public safety and security collapse – but experts say this is not the way to go.

Cholera, as manifested in Hammanskraal, north of Pretoria, is spreading throughout the country in what has been accepted as the consequences of diabolic management of wastewater treatment plants.

‘Daylight robbery’

This as citizens are told there is still no definite source of the cholera outbreak and people do not trust the government’s rhetoric to deal with their pressing needs.

“I pay my taxes but I do not see where they are going. I have no security; I have no water, though I am paying my utility bill. I now have to take my children to a private school but I pay tax. Why? This is daylight robbery,” said Pretoria businessman Abbey Molefe.

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A private school teacher who asked not to be named said she paid R4 000 in monthly PAYE (pay as you earn tax), but her children are in private schooling because public education is shambolic.

She sleeps with one eye open in a country where women and children are murdered daily and also feels robbed because when she goes to the local clinic, the service is terrible and there is no medication.

Abuse of taxes

Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said that there were two elements to a tax revolt. How do you convince the public to enter into a tax revolt because it is against the law?

“The power stands with Sars [SA Revenue Service] … they have powers to instruct the bank to release the funds if you do not pay them. To get a tax revolt you need to have big business on board … because they pay the bulk of VAT [value-added tax], and PAYE, company taxes and excise duties,” he said.

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Duvenage said once you get big business on board, then people need to ask if they want to live in a country where there is a tax revolt, where there are no salaries for nurses, police and army because taxpayers are saying no.

“Then, chaos and anarchy ensue and you do not want to live in a country with that environment, and you cannot undo that,” he said.

Duvenage added that the remedy was not to withhold taxes as this would be akin to cutting your nose off to spite your face.

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“It is a nightmare that you do not want to live in … Rather fix the problem of misspending and bad management. The first choice is you have an election, use the courts to challenge them to stop irrational decisions. Hold [government] to account. It is a case of be careful what you wish for.”

Consequences of a tax revolt

Jashwin Baijoo, head of strategic engagement and compliance at Tax Consulting SA, said the country’s tax base was the minority of the populace due to the unemployment rate.

“Our bottom breadline is subject to tax, so you are looking at 30% of SA that make up the tax base and the bulk of them are financially illiterate, so that means they do not understand the consequences of a tax revolt,” he said.

The consequences of a tax revolt were more rolling blackouts because, without taxes to fill their coffers, there’s no way government can keep the country working.

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“Taxes are for the benefit of a country – free healthcare, roads at the very least, infrastructure. Without taxes we wouldn’t have the R50 million spent by the SA National Defence Force during Covid. It is a possibility but it is a doomed possibility.”

– siphom@citizen.co.za