Renowned economist Dawie Roodt said South Africans should pay as little tax as possible in protest of the government’s ridiculous spending.
Roodt is a founder, director, and chief economist of the Efficient Group and specialises in monetary and fiscal policy.
He is ranked among the most referenced economists in the country and won the prestigious economist of the Year Award in 2016.
At Efficient Group, he is closely involved with the management of client asset portfolios.
Speaking at a Free Market Foundation (FMF) event, he said taxpayers should object to the government’s overspending.
He referenced the growing number of social grants, the looming national health insurance (NHI), and wasting money on state-owned enterprises.
He advised South Africans to show their objection by using any legal means possible to pay as little tax as possible.
“I encourage people to not break any laws but to make use of every possible loophole to pay as little tax as possible in South Africa,” he said.
However, he warned against stopping to pay taxes altogether as it would have severe consequences for the country.
Roodt explained that once people stop paying taxes, including municipal levies, it is very difficult to get them to start paying taxes again – even under a new government.
Government must spend less money
Roodt said the only answer to a looming debt trap and fiscal catastrophe in South Africa is for the government to spend less money.
He said South Africa’s economic growth is being constrained by excessive government spending.
“The high growth needed in South Africa is not possible when government expenditure continues to consume a large percentage of GDP,” he said.
A reduction in government spending will also make tax reductions possible, which will lead to increased savings, investment and growth.
Roodt said if the state is going to spend less money, it is inevitable that it must spend less money on people because that is where the money goes.
“The money in South Africa does not go to the primary functions of the state. It goes to 30 million people receiving grants and two million civil servants.”
He added that the state is highly inefficient – and corrupt in many cases – and can be seen as a big “protection racket”.
Because of the poor government services, including healthcare, education, and security, many South Africans are relying on private companies for these services.
Therefore, the state has broken its social pact with its citizens, who fund the state in return for law and order, security, and property protection.
As the government does not provide the services they get paid to provide, South Africans are sick and tired of paying taxes.