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

‘There is a view that state institutions are being used as political tools.’

JOHANNESBURG – If taxpayers get the impression that state institutions or those charged with the administration of their money conduct themselves unethically, the country will have problems, the Tax Ombud has warned.

“One of the problems we will have, will be that taxpayers will say ‘I will not pay if my money is not going to be used properly. I will not pay if my money is going to be corrupted. I will not pay if my money is going to be used to finance institutions, which are going to abuse their power for political gains’,” judge Bernard Ngoepe (pictured) cautioned at the 6th Annual Conference of the Fiduciary Institute of Southern Africa.

He said taxpayers would be encouraged to pay their taxes if they knew it was going to be used properly. That meant that the South African Revenue Service (Sars) during its collection efforts, but also state institutions and government had to make sure that it conducted itself ethically. It was not enough to argue that conduct was legal.

Ngoepe said if South Africa was not careful to emphasise the importance of ethical behaviour – not only of taxpayers but also of those charged with the responsibility of administering those funds – the country would face difficulties sooner rather than later.

“I almost thought that I shouldn’t come here… this morning following some events last night. I thought what is there to talk [about]… when there is a national topic… overshadowing everything.

“But then I thought that perhaps there is some connection between what I’m saying today and what happened or what was said last night on the news and that connection is that there would be a problem if people begin to think that state institutions behave without ethics, immoral, and like I’ve said earlier on in my paper there is a view that state institutions are being used as political tools.”

His comments come amid reports that actions taken by the Hawks against Finance Minister Pravin Gordhan are politically motivated, a contention denied by the presidency. Gordhan was requested to report to their offices on Thursday in order for a warning statement to be issued, but indicated that he would not do so. The investigation relates to the so-called “rogue unit” that was previously established within the South African Revenue Service (Sars).

Ngoepe referred to an assertion by EFF leader Julius Malema some time ago that Sars had a political motive to pursue him for outstanding taxes.

“The issue is not whether he was right or not. The real question that arises out of statements such as that is do we satisfy ourselves all the time in the way that we deal with things in the country that we conduct ourselves properly in a fair manner and in a manner that is always informed by and based on good ethics.”

Some of the reports it had received suggest that there is a lack of honesty on the part of some individual taxpayers and multinationals operating in Africa. However there seems to be a paradigm shift in large accounting and auditing firms to try and move away from exploiting loopholes in tax law.

“In my experience, a number of taxpayers are, rightly or wrongly, distrustful of at least some of the tax officials; sometimes they perceive them as being corrupt, malicious, and indeed vindictive and sometimes giving the impression that they are being used as political tools. Very often these negative perceptions afflict the entire system.”

Ngoepe said the knowledge that tax collections will be used properly and for the benefit of the people in general is crucial to the inculcation and nurturing of good ethics towards tax payment.

“Corrupt use of public funds, or their improper use, lessens the feeling of guilt on the part of evasive taxpayers, because they give all these ills as an excuse for not paying. No wonder the more corrupt government, the less tax is collected – a recipe for a failed state,” he said.

He however dismissed suggestions that South Africa has reached a point where taxpayers are actively engaging in a tax revolt.

“No, I don’t think we are at that point yet, thankfully.”

Gordhan appointed Ngoepe as the first Tax Ombud during his previous tenure as Minister of Finance. Ngoepe’s term comes to an end at the end of September. He previously indicated that he was open to serving another term.

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Judge Bernard Ngoepe is simply expressing the sentiments of everyone who has been and is honest with their tax commitments. A method will be found to withhold taxes if the government keep wasting or stealing the funds. The civil disobedience will continue en masse until sanity in the exchequer and all government departments prevail.

These are the sentiments of the tax `Ombud. Give the man a Bell’s.

One thing to remember if you hold back tax, make sure that you set aside that money and do not use it for anything. In the future when the regime changes and it will, you will be called on to pay your taxes. The record of your arrears will not go away.

The UK government loses billions where services rendered are paid exVat.

I’m sure its the case in South Africa and part of the observation of the above article.

Not at all ‘pwgg’.

In fact, paying tax over to a corrupt regime like our government in fact could indict one under the law of collusion.

Time to stop paying taxes.

Its all well and good to say that tax payers won’t pay tax, but the reality is that if you are a salary earner your employer is responsible for deducting and paying over tax. You can’t request your employer to not pay the tax collected over to SARS as they would be held liable and would incur penalties and the executive could also be jailed. There has to be a better way to punish government for their theft of taxpayers monies and not accounting for how it is spent. The real travesty is that we as citizens don’t take the government head on, if we did there would not be a single ANC councilor in any municipality/metro, but like it or not those that still support them are probably the child, and other grant recipients and fear the loss of the grant if the ANC moved out of politics.
So there needs to be a clever way to punish the sitting ANC government – what it is I don’t know

A tax revolt can work. A government without money cannot pay civil servants who, in the main, are ANC voters. In order to work you need to start big so that the pain is substantial and immediate. I have said this before and I will say it again. If the CEO’s of the Top 40 companies got around a table and agreed to withhold VAT and PAYE
payments to SARS ( so you only need 40 people to start it )
then the smaller companies on the JSE will have the confidence to follow suit and this will then spread to unlisted companies. The individual taxpayers do not have to anything other than hold back their tax returns. Initially the Rand will get wiped out of course but you have to break some eggs to make an omelette.

Nonsense.

Those CEOs will be arrested forthwith.

Now you are talking Guys! For how long will the group who are trashed as “white monopoly capital” and “colonialists” keep on supporting their abuser financially?
It will take business leaders to make a stand here. Our money is good enough but we are not welcome here. AA, BEE, quotas in sport and business, rampant corruption, cronyism’ power-drunk and arrogant government officials and ANC leadership are making South Africa a very hostile place for honest citizens.

The receivers of grants and government employees as biting the hand that feeds them. It is time now to establish a trust fund with Judge Mogoeng Mogoeng, Pravin Gordan, Trevor Manuel and Johan Rupert as trustees. All taxes by business gets payed into the trust account and not payed out to SARS before this bulls$%t stops. No laws are broken. Businesses are paying their contributions, but they are demanding that it gets spent to the benefit of the country.

Graham, until a few days ago I would have agreed with you. Now that a Senior Judge like Ngoepe has gone out on a limb to warn that people won’t pay tax, and Ramaphosa says he is backing Gordhan, a situation seems to be imminent where corporate South Africa (possibly led by Rupert following his tweet yesterday) is going to heave a collective growl and agree to not pay the PAYE over to SARS. Yes, it’s wishful thinking, but when business leaders met with Zuma and were very polite, nothing happened, but they are totally fed up and may just do the right thing. (BTW, Moneyweb, why does my spell checker keep saying it does not know the word Zuma. By now I would have thought it would be in every dictionary on earth, defined as “Foolish and corrupt clown”).

Don’t even TRY to drag the Rupert family into anything illegal like not paying tax over to SARS. the late Dr Anton Rupert snr and now Johann Rupert are far too mature and wise to indulge in illegal acts like that. NO legitimate company in his right mind would do it – these are MULTI nationals, not little players on home soil only.

@louise
I was joking Louise!!! No-one can possibly serious when it comes to Zuma and his nonsense. 🙂

Agreed.

Business leaders need to make a stand !

These thugs in govt dont understand anything…till it hurts them in the pocket.

Just like illegal E-Tolls, we all now need to make a stand against the unethical looting called ‘tax’

Thats all it is.

Period.

I’ve said this a million times, the only thing you’re going to see is a lot of more cash transactions taking place, which aren’t put through the books.

And its true everyone reading this article have felt this – “I’m sick of paying taxes and then it gets wasted like this” this phrase is quite familiar to us all, just not always in the exact words. (and just to clarity I do not promote/support tax evasion, I merely understand the mind-set)

And yes Give the man a Bell’s

Surely a Jamieson is more appropriate given your username?

Unfortunately the Income Tax Law also regards cash receival as taxable income. No honest person should default there . . .

If it’s in a good cause like getting rid of Zuma then we should be dishonest. After all you can’t get any more dishonest than the clown.

Totally agree

Not just here, but all over the world, taxes are just a guise of looting

But especially here in SA – in effect, every tax paying citizen is already paying for the very things govt is supposed to provide via our taxes [ school/security/medical etc etc ]

Now, with an already diminishing available income, we have to share our hard earned money with these thugs so that they can rack up more expensive cars/wives/overseas trips etc ??

Sorry, not a ****

We tired of this BS.

No more.

The judge is very diplomatic in his words, but what he really wanted to say is f*** off Zuma.

I have made a start on the revolt. I got my discounted (R74) TV licence renewal letter this morning. I replied to them (not that they will read it):
“You really think I am going to renew my licence while Mr Motsoeneng is in charge of the SABC? I’ll think about it after he has been dismissed. It won’t be long now so get used to the idea. The print media is now full of news of an impending tax revolt. You can take this as my contribution. If I pay anything it will be into a trust fund set up by the public, for TV licences, e-tolls and tax, and this will be released only after you and the ANC stop the corruption in this country, which is shameful”

Thank you Mr Ombud! How right you are!

Sorry I am obsessed today. Joke – which came first? The kraal or the run?

End of comments.

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