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Helen Zille’s tax revolt: Could it work?

‘Practically very difficult to implement’ – tax expert.

A large-scale tax revolt would require a highly concerted and coordinated effort, which would be difficult to institute successfully given the significant powers of collection the South African Revenue Service (Sars) already has, a tax expert has argued.

The idea of a tax revolt is not new. High-level individuals – including the head of the committee tasked with a review of South Africa’s tax system, Judge Dennis Davis, and tax ombud Judge Bernard Ngoepe – have previously warned that South Africans won’t continue paying their taxes if the money is wasted.

Read:

Increase in corruption could trigger tax revolt

South Africans won’t pay tax if it’s wasted, Ombud warns 

Although Sars has refrained from calling the slippage in compliance it experienced in the 2017/18 tax year a ‘revolt’, it did note that tax compliance levels were starting to deteriorate and that many provisional taxpayers submitted nil returns.

The issue of a tax revolt has gained new impetus after Western Cape premier Helen Zille took to Twitter and suggested that a tax revolt might be the only way to root out corruption in government in the absence of accountability under the law.

The tweet caused quite a stir, with critics warning that it would undermine democracy and social stability.

Recent tax hikes have been controversial in the face of corruption and state capture, and many citizens have used social media and online forums to support some form of tax revolt, following the apparent success e-toll dissenters have enjoyed.

While there are various forms a tax revolt could take – including non-payment of e-tolls or TV licences – personal income tax, value-added tax (Vat) and corporate income tax accounts for about 80% of South Africa’s overall tax revenue, and these would be the most vulnerable areas for government.

Speaking on Tuesday at a tax briefing in Cape Town ahead of the February 20 Budget Speech, Bernard Sacks, senior tax partner at Mazars, said most personal income tax is collected by way of the employers’ tax system. For a company to withhold employees’ tax and not pay it to Sars, there would have to be coordination between the employee and the employer, and the money would have to be paid into a trust account.

“It is not something that would work particularly easily.”

The same applies to Vat. For a shopkeeper to not pay the R15 of Vat levied on most purchases of R115 over to Sars, there would have to be a coordinated effort between the shopkeeper and the customer.

The collection thereof is already entrenched, which makes these systems more difficult to circumvent than a new system like the one set up for e-tolls.

Sars has ‘wide powers’

Sacks says income tax and Vat are administered by the commissioner of Sars in terms of the Tax Administration Act, which gives the commissioner wide powers to appoint a third party as an agent (to collect tax).

Even if employees sign an agreement with their employer that employees’ tax should not be paid over to Sars and the funds are paid into a trust account, Sars may still appoint the employer’s banker as an agent, effectively helping itself to an amount equivalent to the average employees’ tax.

A tax revolt would practically be quite difficult to implement, but if the public gets upset enough and widespread dissatisfaction starts creeping in, it may weigh on the country’s finances, given that personal income tax and Vat represents such a substantial amount of the overall revenue, says Sacks.

“If you see inroads into those two, it could create difficulties for the fiscus … Personally, I don’t think it is going to happen.”

* Mazars paid for the journalist’s flight to Cape Town.

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She hasn’t learned to leave the social media alone.

So, she’ll be in trouble again.

Really! It is not like she is advocating the slaughter of a race group. Honest citizens, who have been abused for too long by this Government, need a method for forcing this Government to do it job and respect pur taxes otherwise it will never happen so we better start exploring opportunities.

I agree. A tax revolt would teach the criminal syndicate in Luthuli house that the taxpayers run this country not hardened criminals

I agree, and I’ve just read that SABC will NOT be retrenching any workers, so I WILL NOT BE PAYING MY ANNUAL FEES TO THEM!?
They are so bloated and inefficient, that any license fees will just go down the drain to pay all these extraneous workers….and the same applies to paying tax to fund the bloated civil service..and if we could, we should stop paying Eskom by seeking alternative energy sources, as they also are too bloated!??
Its a bloody shame that it has come down to this!??

Have to agree. Not the smart thing to do, especially the comment around teaching voters a lesson that keeps on voting for the ANC. As much as it puzzles me why people would still even consider voting ANC it is very patronizing, not too mention undemocratic to believe you should teach people a lesson for not voting the way you want them too.

DA needs to get back to its liberal roots, but I am also afraid that she has become a millstone arounf the DAs neck and she and some of the other more reactionary types will have to go for the DA to grow.

Have to disagree. Helen Zille is a lot of things but she is not stupid. Corruption has been ridiculous with the ANC, people are fed up. She knows that getting a tax revolt going is almost impossible. This is likely a well thought out political move.

I also find it funny that Zille must get in trouble for this and yet Malema calls Adriana Basson a white boy but that’s cool. Lesufi can go and spread falsehoods about the please call me movement or a school but that’s cool. The Cape Town ANC head went and created a fake racial crisis on Clifton beach, not even an apology or second note.

But Helen says she will get a tax revolt going if corruption doesn’t stop and she must be punished?

Whether or not it can work is irrelevant at this critical point – mere “moments” before one of SA’s most important elections! Never before have us voters needed a viable, strong opposition party to vote for…..

The biggest source of tax in SA is personal income tax. Your employer simply deducts and the onus is on him to pay over failing which he will get the penalty and interest charges. Zille clearly has no clue what she is talking about. I think the old auntie is looking her marbles.

jnr::

I think you are right. If you want financial drama mess with SARS.

What do you expect?

Old bag is a politician….hasn’t done an honest day’s work in decades.

She will be put out to pasture in a few months, and the WC likely to fall under a coalition.

Tata Mama Helen.

Find it hilarious that anyone thinks Zille does not know exactly what she is doing. You may think she has no clue what she is talking about but she is not the stupidest person in the room on this one.

Tax revolt – maybe not – Payment revolt is already in full swing !!!! -Soweto and Eksdom, E tolls, TV licences, Illicit cigarettes, Tampered/bypassed water meters, Illegal electricity connections, Paying cash and no tax, underdeclaration of income etc etc etc.

Helen has made a big mistake here and should stop twittering. While I think a tax revolt is in order now is not the time. Her tweet will give the ANC ammunition against the DA for treasonous actions. The DA should be spreading far and wide examples of ANC looting and explain to the people the reasons for their total poverty is that their leaders have stolen money from them which is why they are living such poverty stricken lives. No schools, hospitals, high crime etc are all due to no money being left over after the immense corruption. Voting ANC will merely result in more of the same. The voters need to be told.

I am afraid that you are very misguided in your conclusion. The average basic income grant recipient couldn’t care about the stealing and corruption. They get paid monthly to vote for the criminal clique of Luthuli House

The average grant recipient gets R1500 a month give or take. remember it is only reserved for the elderly and single moms. On this they often support an extended family. We need to show more empathy to these people, rather than always making them out to be the cause of their own misfortune. If we allways look on them as parasites they are not likely to vote for the party we vote for hey?

@Notwarren

I think you have it all wrong, the ANC have put a lot of focus on ensuring these people stay where they are in terms of wealth, drip feed them basic services to keep them relatively onside. Uneducated and with basic goods being so valuable that you will vote for whoever on voting day as long as they give you something to eat, happens alot in Africa.

The grant is part of that plan, reliant on the state means they are locked in and fear of voting for anyone else in case they change the tune.

I do truly feel sorry for these people because they are boxed in and will do anything to help their jailor.

Helen Zille is expressing her frustration with the corruption and voters support of corruption (which they think is “loyalty”). Maybe a direct tax revolt will mot be easy to implement, but you will be surprised what can happen, the “tax revolt” may not just be a case of withholding tax. People are fed up with the obvious, direct manipulation of government funds (i.e. the people’s money) to enrich individuals who then remain “innocent”. These liars and thieves walk free and are not prosecuted, which says a lot about the rest of the “system”, including those who vote for this “system”. It is a pity that the condition in this country has now reached this level as it is a sick, putrid state of affairs. In my eyes Helen is a heroine and I admire her courage. Only an idiot will not be able to see that she is fighting for the country and its people. Perhaps withholding tax in the form of money may not be the most efficient way to change things, but the word “tax” has other meanings as well, and her statement of intention is now implementing these other meanings, which could escalate dramatically, demand, stress, strain, pressure etc. on the “government”, i.e. she is taxing them.

Well said Ludwig: We all sit
around like Headless Chicken doing nothing other than moaning . The Masses are too ignorant to ever not vote ANC or little Brother EFF , so Im with Helen . Its time a mass of “little Men” got involved .Nobody minds paying tax if its used properly but the massive wealth of Trashy ANC MP,s is proof enough thas its being Siphoned off to them .

The revolt is counterproductive. Please guys – If you’re not happy with the government – vote for someone else – anyone!

The problem is, most taxpayers live in Wards that vote DA and most grant recipients — who vastly outnumber the former — vote ANC and are not going to change.

Persuading them that even a “New Dawn” ANC, captured by SACP and EFF and blinded by discredited national socialist and statist ideology, will not create jobs and dignity.

O dear, other politicians can make the most radical, outrageous and racist statements, from “Die For Zuma” to “Kill All Whites” and the media and ANALysts fete them.

When Godzilla points out what could happen, she is demonised.

As the article says, implementing a tax revolt is impractical and Saffers, who suffer DSTV, potholes, Big Banks, poor service, load shedding, Day Zero and other side-effects of Corruptheid and ineptitude are too easy-going.

Of more concern, if tax collection is the concern, is the tax foregone through inefficiencies (see previous paragraph), “black hole” (in the astronomical sense) ANC-run state owned enterprises and government departments and, worst of all, the lack of investment and “animal spirits”. With or without a tax revolt, SA is lagging other developing nations and much of the rest of the continent in its economic growth. This, not tax evasion or avoidance, is the root cause of our unemployment crisis.

And there lies the rub.
What Helen Zille is expressing is that its unsustainable for a tax base of less than 5 million to support social grant recipients of 17 million (and growing). By not emigrating, the already stressed middle class have agreed to shoulder that burden.
But when that hard earned money is maliciously wasted, that golden goose needs to call it a day.
Effectively what we have is a situation where the current government is bribing the majority of the voter base to keep them in power – hence the ANC will rule until Jesus comes.

Please stop using the term “tax revolt”.
The correct term is “service delivery protest”.

Lol, do you really think that the 9% of the population (taxpayers) actually vote ANC?

Most taxpayers would never vote for a party that denigrates and belittles them whilst being milked into poverty.

Sounds easy! those guys burn tyres, litter, destroy property and burn trucks and just walk away.
We do it the colonialistic western way, with hold tax!!! Then our file is flagged by SARS for the rest of your life, part from penalties and interest and it will get you no where.

My bum burns when I pay tax, but I am not about to break the law or even venture into the twilight zone. Helen you really are a fool and between you and Musi the DA is finished.

I see many commentators mention “It won’t work in practice, as PAYE gets deducted from employer payroll, or from pensions” which accounts for the majority of tax collected. Fair enough.

Since there won’t be a (full scale) tax revolt, I strongly encourage SARS/FinMin to drastically increase personal income tax max marginal bracket from 45% to 60%; reduce the primary rebate from R13K to R4K (in effective dropping the annual tax threshold from R76K to R20K).

We can fume, but there won’t be a revolt. Employers will continue to deduct.

Thanks Helen for giving your colleagues a wake-up call. DA should stop the hate politics and start telling the masses what their plan is to get us out of the dwang. Then maybe they will accept that voting for corruption will lead to disaster.

Could we have an updated report from the tax ombudsman, my guess is the complaints have skyrocketed.

There is a lot employees can still do to reduce tax and hence the money paid to government, albeit for the short term.. Rental property expense, increasing your RA contributions or investing in section 12 j funds.. Just some thoughts..

How about ignoring requests for supporting documentation, followed by legal aid for people who refuse to pay unfair “additional assessments”.

Or borrow from SARS’ “Staligrad Strategies”:
Not reply to phone calls, but insist on emails
Flood SARS with Request For Reasons and trivial objections
Rather than replying to their queries immediately, wait the full 21 days
Request more clarity on their requests for further particulars
Etc
Etc

Two can play the same game.

The bottom line is that if SARS, NPA, SAPS, Hawks, AFU etc follow up on the evidence before the Zondo Commission, Zille’s shock-politics threat falls away.

@Verreweide. Indeed, these examples will reduce one’s “taxable” income.

However, it does not makes sense to spend (or lose?) 1 Rand in order to save 41c (or lower depending on your marginal tax bracket)

Sure, making say a R10K rental loss, will save about R4K in tax…but one’s financial situation is still negative. RA Funds always a sound choice, but it will end up as mostly compulsory funds (post retirement) locked up within the SA asset management system. Section 12J has a certain high risk profile not for everyone.

Wait…S18A charity donations. Now here’s a great way of reducing tax. Yes, once again you spend 1Rand in order to save 41c in tax…but the priceless “feel good” factor favourably outweighs the negative cash flow 😉

In 2018 Tax revenue collected amounted to R1 216.5 billion, growing year-on-year by R72.4 billion (6.3%) mainly supported by Personal Income Tax. The objective of a “tax strike” is to reduce the money we send to government – until corrupt public officials who were identified in the various commissions are prosecuted. One of government’s biggest sources of government income is PAYE (http://www.sars.gov.za/Media/MediaReleases/Pages/20-December-2018—Tax-Statistics-2018.aspx), hence if we few taxpayers (7.3 million) collectively reduce the amount of TAX we send to government, through maximizing all and every possible legal deductions for the short term (albeit spending spending R1 to save 41c), we can send a strong message to those in power! All it will take is for the few PAYE payers to max out all deductions for 2 or 3 consecutive years and the revenue collection will be severely affected.

I applaud HZ on this. She is completely frustrated by all the absolute buffoons who vote in this country.
Clearly the only way to get through to these parasites oin Govt is to stop gifting them FAT salaries.
I drove through four new potholes on the way to work this morning. Investing in this country has become a clear no-no.
Why should we continue to fork out money for non-existent services?

A tax revolt of sorts is already in full swing. What percentage of the total potential excise duty on cigarettes, petrol, and alcohol is actually paid? What is the extent of illegal smuggling of these over the country’s leaky borders? Other goods smuggled into South Africa? E-toll? Businesses where the owner lives “… out of the till”. If an unregistered shebeen owner buys a bottle of liquor at Makro for R150 and sells it at R10 per tot in his shebeen, what happens to the R19.57 in VAT that should have been collected on the R150 profit? What percentage of shebeens have a turnover higher than the threshold for VAT registration?

Voting for the ANC is like the people in Zim voting for ZANU-PF, you vote for your own demise and hardship, under the guise of “loyalty”.

The key issue here is voter education and the DA has done nothing to press the IEC on voter education.

Most people do not no how to vote. They protest in the streets and then vote for the same party again.

I don’t think she meant it literally, it is merely a sign, after weeks of Zondo commission revelations, of just how gatvol people are getting of seeing this level of blatant public money theft going on, and nothing of consequence ever happens to the guilty ones. What else can be done to get the message through that people have had enough? Yes you can, (and should) vote, but the lead that the anc has in the amount of voter fodder it has accumulated over the years, will mean that it effectively makes little difference. I am sure everyone is open to different/better suggestions?

Gosh, but you’re really almost feeling SORRY for her in your comment.”I don’t think she meant it literally……”
She is the DA Provincial LEADER! She can be expected to communicate, whether on Twitter and all other forms of communication, is a way that doesn’t leave people having to GUESS at what she may have meant. Especially before an election!
Please don’t get me wrong; I have the greatest respect for Zille and her family and the terrific work they have done for SA over many years. Especially now also the case in which her son is so shoddily treated by a misguided, possibly corrupt, public protector.
But when it comes to Zille’s call for a tax revolt right before this election, I must agree with Tony Leon on Cape Talk Radio; Zille fails to correctly read the CONSEQUENCES of her utterances.
In this case, the consequences are ammunition for the ANC – something us voters really don’t need at this time!

Is that the Tony Leon of “Fight Back” fame? Has he learnt anything, or a good example? Methinks not. The cur should put shoulder to the wheel and support Zille.

Tax revolt. I mean Jesus himself could not bring himself to do it. It’s there, in the bible.

Otherwise at the end of the day voters of ANC, the pensioners, those that receive services etc will have a solid evidence not to trust the likes of DA ever again.

This will bring the rise of socialist.

If Helen is not campaigning for the ANC, she is doing it for the EFF.

Zinger, please don’t quote fairy tales as your reference, this is a serious site. Thanks

It’s not our problem you refer to it as a fairytale, and you are a nobody to tell anybody what to do and what not to do.

Dear Zinger – the Bible is not an authoritative source for a financial website, neither is Harry Potter nor is Enid Blyton. By all means use the metaphor but as a literal or factual source, rather stick to Facebook. Many thanks (no I’m not going to hell, its also made up BS)

Every person in SA should get one vote. However, for every X amount of tax you paid the previous 5 years you get another vote. In that way the people who contribute most to the government gets most say in who it should be

False… Money is not the begin and end all.

Would corporations get votes? Controlled by the boards? That is just a shockingly poor idea.

Although a qualified democracy is a good idea, I’d base mine on education.

IF YES GET MORE VOTES
Survive crime till over 18 = 1 vote
Matric certificate = 1 Vote
Pay tax = 2 Votes

PICK HIGHEST ONLY
Trade Certificate = 1 Vote
Diploma = 2 Votes
Degree = 5 Votes
Hounours = 10 Votes
Masters = 15 Votes
PHD = 20 Votes (earned and learned not honorary)

No corporates cannot vote (have to be individuals). And there would be a cap.

My idea is actually quite good. As is yours. Both are pipe dreams unfortunately

At the end of the day voters of ANC, the pensioners, those that receive services etc will have a solid evidence not to trust the likes of DA ever again.

This will bring the rise of socialist.

If Helen is not campaigning for the ANC, she is doing it for the EFF.

…” not to trust the likes of DA ever again.”

That’s already happened in the Western Cape/Cape Town.

The writing’s on the wall.

Not to trust the D A?? That is laughable when you listen to the Zondo commission , etc, etc etc

@Nostra, you are aware that Agrizzi implicated some of the Western Cape Provincial Departments run by the DA at the Commission right?

“and corporate income tax accounts for about 80% of South Africa’s overall tax revenue, and these would be the most vulnerable areas for government.”

Not One Mention of Crypto Currencies or Blockchain in this article/comments!

As an E-commerce company we are receiving crypto currency payments from buyers,soon our local suppliers and manufacturers will have to take crypto as a payment(Some Are) or their competition will(Pressure),most goods are imported and Crypto,USD is the acceptable currency.Our Workers love Crypto.

South Africans have looked at Zim citizens and Zim Citizens are getting cleverer by the day in terms of crypto.South Africans are catching on very fast.

Zille`s Idea has merit!

If most South Africans emty their bankaccounts into Cryptowallets and Crypto is excepted everywhere(You just need a Smartphone to pay)…well ..well boys You have a massive Tax Revolt! As easy as that!

Now we are getting some value. Most just squeal; “can’t be done”, “think of the consequences” etc etc like whipped puppies. Give us some clever ideas.

Crypto Currency needs to be Accepted rather than Excepted everywhere : Last Para

Helen is smoking the wrong kind of dagga … The DA is appearing very desperate at this stage

The DA has its shortcomings but it is far better at government than the ANC, if you look at the Western Cape and the DA run municipalities.

The DA should simply stand for “Good Government”.

Our Constitution and Bill of Rights obsesses with entitlements, unlike most such laws which focus on restrictions, particularly on those in power.

To say a tax revolt is undemocratic miss the “taxation without representation” bit. Superimposing a map of voting on one of tax-payments (with house prices as a proxy) indicates that most taxes are paid by people who do not vote ANC.

There are many forms of tax revolt. One, may be to learn from the ANC’s Stalingrad Strategy and SARS tactics and to delay and question every query. Instead of responding promptly to SARS queries, taxpayers could stretch out the reply to the maximum 21 days (lifted straight from SARS tactics) and then request reasons for every decision, reasons for those reasons, etc. All within the law. Then there is “denial of service”-type tactics: when submitting documents, duplicate forms, add blank pages, etc. All “by accident” of course.

Many taxpayers do not quibble over small dis allowances, treating them, like small bad debts, as not worth the trouble to contest. In a “revolt” situation that would change, with every cent being disputed, tying SARS up and delaying collections.

If enough people get angry enough, it could slow down or cripple SARS’ collections. Perhaps, like Donald Trump, the ANC needs a government shutdown to come to its senses.

BTW: Zille did not threaten a tax revolt, only one if the cover-ups of Corruptheid continue. If Ramaphoney and the NPA do their jobs and prosecute, her threat becomes moot.

There is already a formal tax revolt going on, I seem to recall reading a article on here about the amount of financial immigration going on and it was big numbers. Can’t see that trend changing any time soon.

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