Finance Minister Tito Mboweni’s Budget speech shows the extent to which the government ‘is making South Africans pay through taxation for the consequences of corruption and expropriation policy’, the Institute of Race Relations (IRR) says.
The tax-to-GDP ratio is now the highest in South Africa’s history and is causing considerable trauma across households struggling to afford goods and services ranging from their bond payments to their children’s school fees, the IRR warns.
It notes that despite that burden, ‘the deficit is on a par with depths reached on only three previous occasions – the two World Wars and the aftermath of the Rubicon speech in 1985 as the apartheid economy collapsed under the weight of its contradictions’.
IRR CEO Dr Frans Cronje says: ‘If it carries on like this, the government risks triggering a tax revolt that will see South Africans, where possible, redirect their taxes to bypass the state. This is, in fact, already beginning to happen.
‘It is unsustainable to think that taxpayers will continue to put up with a government whose policies hound investment out of the country and then go on to loot what revenues remain while taking little action to bring the corrupt to book.’
He says the IRR’s ‘strong sense is that communities and businesses will look to provide their own services and many effective and legal avenues to do this exist’.
Were the government to ‘clamp down’ on such avenues, ‘the effect will be to hound those taxpayers out of the country’.