A tax revolt is underway in South Africa

Efficient Group chief economist Dawie Roodt said a tax revolt in South Africa is already happening through aggressive tax planning, capital flight, and skilled emigration.

Roodt shared his views on South Africa’s tax regime and the economy during an interview with Ernst Roets at the Kragdag Conference.

There was a focus on the high tax burden, which is carried by a small group in the population. He said that South African taxpayers are overburdened.

Another problem is that the government is inefficient and that public servants, in Roodt’s words, are “overpaid, underworked, and ineffective”.

“State employees represent 3% of the population but swallow 17% of the economy in salaries,” he said.

With widespread corruption and mismanagement in government, many people have called for a tax revolt. However, Roodt said that this can be dangerous.

“Once you successfully get people to stop paying taxes, it’s nearly impossible to get them to start paying again,” he said. “This can hurt the country.”

Roodt said that many people, including children, rely on government grants to survive. These grants are funded through taxes.

However, that does not mean that people are not quietly rebelling against the high taxes. He said that a tax revolt is already underway in South Africa.

He said that when clients walk into his office, they ask for two things: taking their money overseas and avoiding paying tax.

“People are managing their tax affairs very aggressively. People are taking their money offshore and engaging in aggressive tax planning,” he said.

“People are using various strategies in their companies and personal structures to pay as little tax as possible.”

In more extreme cases, people are emigrating or choose to stop working because the tax burden has become too heavy.

Dawie Roodt’s advice to South Africa

Roodt advised South African taxpayers to make taxation an election issue and to make life difficult for the South African Revenue Service (SARS).

“The first step is to get politically involved and ask politicians whether they are going to reduce taxes and by how much,” he said.

“People should ask for concrete figures on tax cuts and which government expenses they will cut to make it happen.”

The second thing Roodt advocates is that people frustrate the South African Revenue Service and make life difficult for it.

“It isn’t illegal to say this. I am not suggesting you evade taxes. Instead, I am saying that people must frustrate the taxman.”

“Claim every deduction available to you. If you are uncertain about an assessment or decision, lodge a formal dispute against it.”

“When supplying them with information, provide as little as possible. Give only what is strictly required by law.”

“Throw the book at them and bury them under paperwork, just as they do to us. You are fully within your rights to do that. There is nothing wrong with it.”

He advised the country’s taxpayers to subvert the South African Revenue Service at every possible turn.

“Manage your tax affairs as aggressively as legally allowed. Get the best tax planner you can find and look for savings on every conceivable item,” he said.