Crime pays: A different perspective on the crime situation

VernD

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This is an email I received. It made sense to me; what do you guys think though.

Crime definitely pays!

After I was a victim of crime in 2000, I attended many crime discussions,
brain storming and therapy sessions. At each of these discussions the
question came up on how to tackle the symptoms of crime.

The only question never raised was:

Question: "What is the influence of crime on the S.A. Govt?"

Answer: Crime generates millions and millions of Rand's for the S.A. Govt


Here are the facts:

Example 1:

Take just one million home owners in Gauteng who pay for "armed crime
reaction" (not crime prevention) where private security companies react
AFTER the crime has taken place - no wonder they never make any arrests!
This service costs on average R250 p.m. Therefore 1 000,000 x R240.00 X 12
months x 14% VAT, generates R403 million in tax revenue for the S.A. Govt!

Example 2:

A car thief steals a R500, 000 car and receives between R10, 000 and
R30, 000 for his deed.

The car owner is paid out by insurance and then purchases another similar
vehicle, on which he pays 14% VAT of approx R70, 000 as a directresult of
crime. Who profited the most? The thief or the S.A.Govt?

We must begin with a mechanism whereby the S.A. Govt is forced to reconsider
this unconstitutional and immoral practice of profiting from crime!

All South Africans should demand that all payments related to protection of
life and property should be VAT free and Tax deductible!

This principle should also apply to replacement of stolen property as well
as estate duty. If a person dies as a result of crime we should also demand
that estate duty not be paid. How much do you think the S.A. Govt has made
out of estate duty just from the murders of 1300 South African farmers?

The S.A. Govt likes to compare us to overseas. Well overseas your safety and
security is covered by your income tax and is tax deductible!

It is time that South Africans stood together and made the Govt and public
aware of the Govt's "income" from crime. In the meantime crime is the
goose that lays the golden egg

Is it also not unreasonable to expect victims of violence and hijackings to
pay their own medical costs? The Govt should pay for these expenses as well
as family counseling for victims! (After all, they pay the perpetrators'
hospital expenses!)

Come on South Africa, ask the right questions and demand the right answers!
 

ToxicBunny

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Interesting take on things...

Will never happen, but it is interesting
 

Ivan...

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bad reasoning if you ask me

that is like saying yhe Government make money off of people dying because they tax the income of undertakers...

or the Government makes money off abortions because they tax the incomes of the doctors who perform it...

or the Government money off obesety because I like to supersize my fries, and well, that is taxed...

etc, you get the picture.
 

VernD

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that is like saying yhe Government make money off of people dying because they tax the income of undertakers...

or the Government makes money off abortions because they tax the incomes of the doctors who perform it...

or the Government money off obesety because I like to supersize my fries, and well, that is taxed...

etc, you get the picture.
THis is not MY views that I'm putting forward; I just happen to agree with it.

Anyway, your analogies are bad ones, and taken out of context of the original post. (Please read the the original post again)
 

lion_fish

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dont think its a conspiracy to make Gov rich, but it sure as hell lines those pockets a bit faster! :D
 

Ivan...

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hey..woooow relax

THis is not MY views that I'm putting forward; I just happen to agree with it.

Anyway, your analogies are bad ones, and taken out of context of the original post. (Please read the the original post again)
I never said it was your views. (I read it again) But I am saying its a bad way of reasoning. I can also argue that they are making money off of the crazy ideas I have posted above and that those things should be payed for/tax free.

EDIT: Okay, i reread my post, yes my analogies are a bit out of context, but just because the Government is indirectly making money from income that was a result of a crime, doesn't mean that those incomes should be tax free or that it should be payed for by the Government.

The Government didn't commit the crimes so they aren't liable. The people who commited crimes should be held liable for any costs/losses/etc.
 
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icyrus

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Its a shortsighted argument.

The losses incurred in potential revenue due to the negative effects that crime has on the economy will outweigh these sort of fringe gains on taxes.

This argument was not well thought out.
 

derekc

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Its a shortsighted argument.

The losses incurred in potential revenue due to the negative effects that crime has on the economy will outweigh these sort of fringe gains on taxes.

This argument was not well thought out.
yeah I would agree with that 100%. The benefits brought by low crime rates such as FDI far outweights the points mentioned in the argument. Crime's negative impact on ppl's mindset is also a drawback and drives ppl away.
 

mercurial

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i read something like this a few years back. it's an old conspiracy if you ask me :p
 

Frikkenator

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Its a shortsighted argument.

The losses incurred in potential revenue due to the negative effects that crime has on the economy will outweigh these sort of fringe gains on taxes.

This argument was not well thought out.
Yup, I agree 100%.

The amount of foreign currency lost because of a drop in tourists and a massive drop in foreign investments because of crime by far outweighs the amount of money they will generate from this.
 

VernD

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Whoah . . . whoah

:eek: People, you are clouding the issue here with talk of revenue loss and foreign investments and conspiracy theories blah blah blah. :confused:

What the writer proposed here is simply that your expenditure on crime prevention, and protecting your life ,or, any expenditure as a result of you being a victim of crime, be tax-deductible (not sure if this is the right word - feel free to correct me) - same as your retirement annuity contributions.

Benefit for you - this decreases your tax liabilty; gosh, might even create some tax credits, mind you.

I don't see the goverment benefitting from this model though - this is probably why it'll never be implemented :(
 

Mr TB

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Example 2:

A car thief steals a R500, 000 car and receives between R10, 000 and
R30, 000 for his deed.

The car owner is paid out by insurance and then purchases another similar
vehicle, on which he pays 14% VAT of approx R70, 000 as a directresult of
crime. Who profited the most? The thief or the S.A.Govt?
Although I agree with the statement "crime pays" your example is flawed. Your understanding of value added tax is seriously flawed...

If the total cost of the car is R570 000= incl vat, the insurance company will pay this amount to the owner of the vehicle or the seller of the vehicle.
The insurance company is however allowed to claim the R70 000= vat back as an input tax. The seller will pay over the R70 000= vat he received as output tax. The nett gain for the SA Govt is nil...

Please do not believe any nonsense people spout concerning tax it is a complex and interesting subject...
 

ToxicBunny

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Ummm, your understanding of VAT is seriously flawed Mr TB.

In any transaction that VAT is applicable to, there is going to be some "profit" for the guavamint. Yes a portion of it gets claimed back, but not all of it.
 

Mr TB

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Ummm, your understanding of VAT is seriously flawed Mr TB.

In any transaction that VAT is applicable to, there is going to be some "profit" for the guavamint. Yes a portion of it gets claimed back, but not all of it.
I do not think so... the transaction contains no added value that can be taxed... therefor R70 000= less R70 000= equals nil, no extra tax for the government...

The government actually lose out because the stolen vehicle is sold for say R30 000=, on that R30 000= 14% VAT is payable. The loss in revenue for the government is then R4200=.

In the same way Icarus claims that donations should be taxed.
What will happen to places like the SPCA if they are taxed on the donations they receive?
It is quite clear that those calling for churches to be taxed do not understand tax laws and the reasons churches are not taxed...

The money given to churches have been taxed already....:)
 

ToxicBunny

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Yes, the guavamint get paid VAT when a stolen vehicle is sold in an illegal transaction.

Please Mr TB, go back and study how VAT is supposed to work, the government do end up scoring in the end... and a vehicle is NOT a zero-rated VAT item.
 

Mr TB

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Yes, the guavamint get paid VAT when a stolen vehicle is sold in an illegal transaction.

Please Mr TB, go back and study how VAT is supposed to work, the government do end up scoring in the end... and a vehicle is NOT a zero-rated VAT item.
So I then assume you worked in the vat auditing section of SARS...
Peace...:)
 

ToxicBunny

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Well its painfully obvious that you didn't....

so whether I did or didn't is actually irrelevant. I have run my own business, I have studied tax law.
 

HavocXphere

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Mr TB said:
Your understanding of value added tax is seriously flawed...

If the total cost of the car is R570 000= incl vat, the insurance company will pay this amount to the owner of the vehicle or the seller of the vehicle.
The insurance company is however allowed to claim the R70 000= vat back as an input tax. The seller will pay over the R70 000= vat he received as output tax. The nett gain for the SA Govt is nil...
Haha. In Zim perhaps.
1)Insurance companies can't deduct input VAT on payouts.:D
2)VAT does not apply to financial services.
3)If the net total is nil on a non-zero-rated product then someone gets hunted down.
 

Mr TB

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Haha. In Zim perhaps.
1)Insurance companies can't deduct input VAT on payouts.:D
2)VAT does not apply to financial services.
3)If the net total is nil on a non-zero-rated product then someone gets hunted down.
No wonder the insurance only paid out only R500 000= for the vehicle and not R570 000=...:).

Which will be the correct procedure, no one is to gain from theft, the R500 000= replaces the original value of the vehicle lost for economical purposes, maybe that is just a bit hard to figure out...
 
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ToxicBunny

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Ummm, you obviously have less than no clue about how tax works do you Mr TB?

The VAT is included in the price of the new vehicle. The money the insurance company pays you is the settlement price of your OLD vehicle, which you then use to buy a new vehicle on which you pay VAT because it is included in the price.

The government DOES benefit via added VAT transactions from people replacing their stolen valuables.
 
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