At this year’s Tax Indaba, the Commissioner of the South African Revenue Service (Sars) noted his concern about the pervasive disillusionment among taxpayers, says Du Toit.
For the average person, a tax revolt is where taxpayers, in an act of solidarity, resolve to abstain from their civic duty of paying their taxes. This may be in protest against tax policy, where taxpayers as a collective perceive the tax(es) to which they are subjected as being unjust, says Du Toit.
A tax revolt may also occur where taxpayers do not agree with the manner in which the government chooses to “spend” the portion of their earnings they had to part with.
Du Toit says one may broadly identify two types of taxpayers who revolt against paying taxes:
* Those who do not pay and never have paid taxes, perhaps out of disdain for the very concept thereof.
* Those who, from some misguided sense of virtue, feel justified in discontinuing their tax obligations.
In the latter case, taxpayers somehow legitimise their behaviour, often because they do not think they have to contribute to a leaky bucket, or they feel they have already contributed more than their fair share. These motives may also be a veneer for the actual reason for adopting a non-compliant lifestyle, which is that the taxpayer lost their fear of prosecution.
These types of tax revolts are illegal and cannot be rationalised, he says.
There is a second type of tax revolt, a less unscrupulous kind, where taxpayers deprive Sars of revenue by using legal means. On a small scale, this may be achieved by consuming zero-rated goods only, or by kicking your smoking habit and adopting a teetotal lifestyle, thereby depriving the state of VAT and “sin” taxes, says Du Toit.
A far more effective, yet legal, act of defiance would be to cease your tax residency, in which case Sars would no longer have a claim to your worldwide income and capital gains, says Du Toit.
Although the largest contributor to national revenue is personal income taxes, a comparatively small number of taxpayers in this segment bear most of this burden, he says.
The taxpayers who seem to be leaving our shores are some of those relatively high earners on whom Sars relies heavily, says Du Toit. With the prevailing budget shortfall, taxpayers can expect increased aggression from Sars when it collects taxes this season.