Is it right to pay tax when clean and safe hands are missing at the till?

Johannes Wessels (@johannesEOSA1)

SARS commissioner Edward Kieswetter’s biggest headache is not the gaping R300 billion crater in tax income this financial year or the growing Everest of assessed losses for companies that will impact negatively on CIT for years to come. His biggest problem is how to convince taxpayers to sustain a government that under the pretext of “a better life for all” has served up a toxic mix of corruption, wastage, mismanagement and anti-growth policies.

In addition, the very same government has doggedly pursued a lockdown strategy not underpinned by much logic that could yield any outcome other than a severe economic disaster with long term humanitarian effects. These effects include shortened lifespans, poverty related deaths, and deaths from medical conditions the government deemed non-essential. The toll of this inept strategy will in all likelihood dwarf the real Covid 19 death toll.

Lockdown has mowed down millions of jobs and several hundred thousand businesses. Those that survived have been severely crippled: they have a radically reduced income, have run up losses or have achieved less than half their previous taxable income.

One recalls the words of Saint Augustine, bishop of Hippo Regius in North Africa, whose theology and philosophy influenced ancient as well as modern thought: “Without justice, what are kingdoms but great bands of robbers?

Tax compliance in a lockdown context

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Sin tax to plug the hole in SARS coffer: the government laying the table for a Boston tea party?

Johannes Wessels
@johannesEOSA1

The prolonged lock-down has been a roaring success: not in enabling the public health system with “sufficient beds, ventilators and staff” for the inevitable “Covid-peak”, but in empowering organised crime syndicates.

Not only did the ban on the transportation and sale of liquor and cigarettes provide an unprecedented window of opportunity for already existing smuggling networks to strengthen their production and supply chain networks, they were wholeheartedly supported by the government to expand their client base exponentially.

The government by decree stopped the legal trade in liquor and cigarettes, effectively providing a protected oligopoly for the smuggling networks. Since there was no competition, they hiked their prices. That saw:

  • cigarette cartons that would cost around R450 before lock-down selling at anything between R1 500 to R2 000;
  • Gordons Gin selling at four times the pre-lockdown price, and
  • A litre red Robertson box-wine fetching R1 400, easily beating some of the prices achieved by top wines at the Nederburg Auction.

Patel hounded Dischem, but the smugglers, spazas & tenderpreneurs were the price hikers

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The celebration of rampant incompetence

Johannes Wessels
@johannesEOSA1

As grotesque neon-light signboards shout their messages out in the darkness of night, the ANC’s signature of their quarter century of rule has been rife in evidence in the first weeks of 2020. No, not the good life of liberty that the movement had promised, but the embrace and celebration of rampant incompetence.

Nowhere was that more obvious than:

  • in the jubilation about matriculation results;
  • when senior well-decorated police officers didn’t know their right from their left at the funeral of Richard Maponya;
  • in both the presentation of and applause for the platitudes in Pres. Ramaphosa’s ‘January 8 speech’.

Matric results: better outcome than Bantu education?

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The City of Surreal Ramaphosa on the banks of the Rubicon

Johannes Wessels
@johannesEOSA1

Cyril Ramaphosa’s vision of “a first post-apartheid city with skyscrapers, schools, universities and factories” (if implemented) has all the potential of becoming a disastrous social engineering experiment wasting resources on a massive scale. Not because the idea of a new city is wrong per se, but simply because the president is ideologically wedded to state-led development, holding a very negative view of the role of the private sector.

Ramaphosa doesn’t consider the private sector as efficient or more effective than the public sector, despite the fact that State-owned enterprises are mismanaged, bankrupt and a drag on economic development with Denel and the SABC even struggling to meet salary commitments.

Peas of the same pod

The creation of such a city is, in the Ramaphosa framework, not a vision of dynamic economic growth, but an ideological blinkered perspective of how government can improve society. Ramaphosa and all the social engineers within the ANC are, in that sense, not far from the approach of Hendrik Verwoerd. The National Party was, just like the ANC, a force pursuing transformation through prescription and limitation of choices.

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From idiom to disaster: the radical transformation of “daar’s ‘n drol in die drinkwater”

The incapacity of Government to fulfil its basic task to effectively protect the rights and property of all persons (natural and juridical) thereby ruining economic growth, is matched by its dedicated neglect of scarce natural resources. In a water-scarce country like South Africa this amounts to much more than an ecological disaster: it borders on economic suicide.

Like people, no single enterprise can thrive without access to reliable water. The situation in South Africa remains far better than in most African countries. However, not every middle-income country can boast its Government has systematically:

Daar's 'n drol in die drinkwater

  • undermined its own water resources by extending (within a mere 12 years from 1999 – 2011) the poor ecological condition of its main rivers by an astounding 500% with some rivers pushed beyond the point of recovery (March 2018 Draft National Water and Sanitation Master Plan);

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If you think a clean municipal audit is scarce, try to get a call answered quickly

Are we becoming a nation that celebrate losses? After each of the many Springbok losses ex Bok coach Allister Coetzee oversaw, he found “much positive to build on”. When reacting to the Auditor General’s scathing report about the financial management at local level, Zweli Mkhize, Minister of Cooperative Governance & Traditional Affairs and his deputy Andries Nel reminded me of Coetzee.

The Auditor General (AG) reported:

  • A 75% deterioration in in unauthorised expenditure to a level of R28.3 billion – a figure higher than the expected income from the increase in the VAT rate;
  • Team Failing Clean Audit Municipalities trumped team Clean Audit Municipalities by 224 – 33, a loss comparable to the All Black’s 57 – 0 trashing of the Boks, though damaging not only South Africans’ enthusiasm, but their financial well-being too;

Screen Shot 2018-06-07 at 8.54.36 AM

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