A tax revolt is underway in South Africa

  • Thread starter Thread starter Daily Investor
  • Start date Start date
TheMightyQuin said:
Legally avoiding tax or emigration...is NOT a tax REVOLT, Dawie.
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At the scale that aggressive tax planning is happening now in South Africa, it kind of is. We are already way past the peak of the Laffer curve.

I haven't paid a cent of personal income tax in the past 5 years. It has taken some work, and some serious fighting with SARS to achieve that, but I see it as my duty to do so.

They raised a new audit on my 2024 tax return earlier this year - and suddenly decided I owed them about R64k for the year. I spent considerable time preparing my own files and all the paperwork to prove them wrong. Realistically, probably more time than it was worth - but that is irrelevant; I do not want to pay them any personal income tax at all - and will work hard to keep my tax free record running.
 
vigras rojara said:
I wonder how many people are "choosing to stop working, as the tax burden is too high", as claimed by Dawie? Can't be very many.

They could probably be counted on Oscar Pistorius' toes.
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I guess it depends on how you measure it. In absolute terms, probably not many - but in terms of actual nett contributors to the tax base, I would think its a significant amount. Especially a significant amount of those who have a decent chunk of investment income, but are still fit healthy and able to contribute to the workforce, but choose not to to avoid additional taxation.
 
Zellephant said:
I guess it depends on how you measure it. In absolute terms, probably not many - but in terms of actual nett contributors to the tax base, I would think its a significant amount. Especially a significant amount of those who have a decent chunk of investment income, but are still fit healthy and able to contribute to the workforce, but choose not to to avoid additional taxation.
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I doubt many people don't work purely to avoid paying tax, I really do. That sounds unlikely. Plenty of people don't work as they have investment income though, or start their own businesses and maximise their tax efficiency, as you mentioned earlier.
 
vigras rojara said:
I doubt many people don't work purely to avoid paying tax, I really do. That sounds unlikely. Plenty of people don't work as they have investment income though, or start their own businesses and maximise their tax efficiency, as you mentioned earlier.
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So, you dont consider it a loss to the economy if someoen with suffiecient investment income not to need to work, chooses to not take on more work, in order to avoid triggering a taxable event.

Because let me tell you, I, as someone engaged in extremely aggressive tax planning, but still far from wealthy enough to stop working, need to be very selective of what private jobs I do, and consulting work I take on etc, in order to make sure I keep on "earning" little enough not to trigger a personal income tax payment. There are a lot of people with a lot more to contribute than me, that are choosing not to do so, because it would complicate thier tax planning too much.
 
Zellephant said:
So, you dont consider it a loss to the economy if someoen with suffiecient investment income not to need to work, chooses to not take on more work, in order to avoid triggering a taxable event.

Because let me tell you, I, as someone engaged in extremely aggressive tax planning, but still far from wealthy enough to stop working, need to be very selective of what private jobs I do, and consulting work I take on etc, in order to make sure I keep on "earning" little enough not to trigger a personal income tax payment. There are a lot of people with a lot more to contribute than me, that are choosing not to do so, because it would complicate thier tax planning too much.
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I don't think such circumstances cost the fiscus very much, regrettable as they may be. And of course, any loss is a loss.

It's also very common globally for people to make those kind of calls - certainty not a uniquely South African situation.
 
vigras rojara said:
I don't think such circumstances cost the fiscus very much, regrettable as they may be. And of course, any loss is a loss.

It's also very common globally for people to make those kind of calls - certainty not a uniquely South African situation.
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Sure, not unique to South Africa, but particularly unfortunate in an economy like ours, which is failing. It's all good and well in an economy that has low inflation and double-digit economic growth - but in one like ours, you can't really support losing any real productivity - because the trickle-down effect of high-net-worth individuals' economic activity is critical for growth.

Since we are way over the peak of the laffer curve, any amount of easing of taxation will see immediate benefits to our economy - but our greedy, inneficient and corrupt governement can only think short term, and they cant afford to lose any money for treasury, because they need it to keep their gravy train running.
 
Zellephant said:
So, you dont consider it a loss to the economy if someoen with suffiecient investment income not to need to work, chooses to not take on more work, in order to avoid triggering a taxable event.

Because let me tell you, I, as someone engaged in extremely aggressive tax planning, but still far from wealthy enough to stop working, need to be very selective of what private jobs I do, and consulting work I take on etc, in order to make sure I keep on "earning" little enough not to trigger a personal income tax payment. There are a lot of people with a lot more to contribute than me, that are choosing not to do so, because it would complicate thier tax planning too much.
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If you want to call being jobless or earning so little that you do not pay tax, a tax revolt...you're living in a desperate fantasy world.

Being poor on purpose is definitely not "sticking it to the man".

A true tax revolt, is when corporate stop paying over PAYE and VAT to SARS...and that will never ever happen.
 
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