Durban - Finance Minister Malusi Gigaba says that he does not foresee a “tax revolt” among South African citizens who are fed up with corruption and government’s poor spending habits.
“We will revolt against those who revolt against paying taxes,” he said during a question and answer session at a business breakfast in Umhlanga on Tuesday morning, a week after delivering the country’s mid-term budget.
Gigaba said that questions about a possible tax revolt showed an underlying pessimistic attitude toward the country’s economy. “It is a bad message to communicate,” he said.
Everyone was obliged to pay taxes, the minister said.
“It’s a pessimistic view and a bad message to communicate. The reason we have a huge revenue shortfall is clearly because of the underperformance of the economy.”
Gigaba said there were challenges with regard to tax administration but that they were being addressed. “The issues that were raised by the tax ombudsman with regards to tax refunds are being addressed.”
The South African Revenue Services had comparable tax collection skills as in “the past”, he said, but needed to increase its capacity in areas that dealt with illicit financial flows, base erosion, profit shifting and corporate income tax, he said.
The country had one of the highest tax compliance rates in the world, he said, adding that South African citizens were generally more tax compliant than citizens in the United States.
Addressing issues around government making the country an investment-friendly destination, Gigaba said that South Africa had a strong financial sector, strong judiciary and constitution, youthful population that wanted to work and world-class infrastructure.
“Mine investments are safe because they will not be subjected to abrupt or ad-hoc illegal elimination,” he said.
The country’s infrastructure was a draw-card, he said, as could be seen by electricity generation on the continent.
The southern African region was “quite stable”, he said and had not received enough credit for this.
“I am not saying this in derision to our other regions on the continent. In the north [of Africa] you know the difficulties, in the centre you know the challenges and in the east and west. Southern Africa is pretty much stable, and that should augur well for anybody who wants to invest,” he said.