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Death and taxes - lessons on the recession from the Roman Empire

For an era that had little democracy to speak of compared to the modern world, ancient times carry some valuable lessons for today’s leaders.

The financial pressures households currently face call to mind ancient world rulers who heaped tax increases on their subjects, with no care of future electoral prospects or approval ratings.

For over a thousand years, the Byzantine Empire, also known as The Second Rome, was the richest and most advanced kingdom on earth, the epicentre of human development and the capital of the Christian world.

From August 1, 527 – November 1, 565 AD, the leader of the empire was Emperor Justinian. The empire’s capital, the city of Constantinople, was the envy of all other kingdoms in Europe and the Middle East.

Among others, the city of Constantinople – now Istanbul – had landmarks like the Hippodrome, the Hagia Sophia, the colossal aqueducts of Valens and the city’s impregnable Theodosian walls.

Worlds apart?

Superficially, the differences appear stark.

Over on the southern part of the equator, in the 21st century, Cyril Ramaphosa is the president of South Africa. The country is considered a darling of constitutionalism, having pulled itself from the edge of disaster 24 years previously, choosing elections over conflict.

Yet SA is still limping from a long legacy of poverty and inequality, battling to come to grips with stubbornly high unemployment (nearly 27%) and the aftermath of nearly nine years under former president Jacob Zuma which, at the very least, hurt its image.

Despite these challenges, South Africa still enjoys favour from the economic world, with even the International Monetary Fund (IMF) remarking in its latest report on SA that the country has sophisticated economy, advanced infrastructure and strong institutions compared to other African states.

However, Ramaphosa, a man who charged his way to becoming leader of Africa’s oldest liberation movement, and Emperor Justinian, an ancient dictator who could easily have been one of the richest men of the ancient era, have one thing in common.

Both were bedevilled by the public rejection of escalating taxes and the rising cost of living that their people were forced to bear.

Believe it or not, the campaign to cast Ramaphosa as a tax-heaping fiscal conservative has started, months before the national elections that he hopes to win.

Rebuilding costs money

The story of Emperor Justinian had the potential to be flattering. He was widely considered an intelligent, diligent, wise and brilliant emperor by his peers and his subjects alike.

He galvanised his kingdom behind his vision that the Byzantine Empire would be the greatest nation in the world. He maintained a mighty empire, despite the fact that it was surrounded by rivals, including the Sassanid Empire to the east, and the Huns and the Bulgars.

The one act that Emperor Justinian was convinced would cement his legacy as a great ruler of the Roman Empire was to take back the western side of what was once under the empire, namely Rome.

The capital of the empire was moved to Byzantium and renamed Constantinople by Emperor Constantine. Taking back Rome was a conquest that Justinian knew would take work, sacrifice, ingenuity and, most of all, money.

Emperor Justinian would proceed with what would become some of the most aggressive tax hikes in the history of the empire. So unpopular were these tax hikes that Byzantines from different walks of life marched to Constantinople’s Hippodrome in protest to the rising cost of living.

Unfortunately, Justinian and Empress Theodora had about as much sympathy on the peasants, noblemen and aristocracy of the time as one would expect from a supreme ruler. Justinian, with Theodora’s blessing, sent the soldiers of the empire to the protesters to have them massacred.

According to historical accounts, up to 30 000 rioters were killed during the Nika riots, because they were not on board with the massive tax increases aimed at helping Emperor Justinian win back territory that was once the seat of the Roman empire.

Back to the future

President Ramaphosa is, thankfully, not an emperor, and executing delinquent taxpayers is generally frowned upon at SARS.

But Ramaphosa is a powerful leader of a nation vulnerable to a host of shocks to its fiscus. And how much more shocking than the storied history of recent state capture could things possibly get?

And, unfortunately, it appears the poor are bearing the brunt of much of the recovery period.

When then-minister of finance Malusi Gigaba took to the podium at the National Assembly in February and announced a value added tax (VAT) increase of one percentage point, responses were varied, but the announcement dispelled any impression that South Africans could hope to escape a difficult year.

VAT vendors soon got in contact with taxpayers to let them know that there would be adjustments to the monthly financial commitments. These included banks, cell phone network providers and other financial institutions.

The South African Reserve Bank noted a "decline in the financial outlook … due to a deterioration in the outlook of low-income earners".

Experian Consumer Default Index (CDI) found that South African consumers were battling to repay their major purchases and taking on more credit to fund their lifestyles.

There were a series of petrol price hikes that saw even opposition parties rise up to demand that the African National Congress take action. Consumers had to deal with four months in a row of petrol price increases.

Make or break

Certainly these increases have been influenced by factors beyond Ramaphosa’s control.

It is also a stretch to liken a president, the product of the constitutional democratic process, to an emperor who could do entirely as they please.

But heading up to the elections, where Ramaphosa must compete for re-election, this may matter little in the face of an ongoing household pressure and critics' desire to make him look like less of a compassionate leader and more of an overarching technocrat seeking to squeeze the last bit out of taxpayers.

The pressures persist, despite Ramaphosa’s ongoing quest to collect $100bn in investment for South Africa.

Entities are reeling from years of mismanagement and plunder, social programmes will come at an immense cost to most South Africans if they are to continue at a consistent scale, and Ramaphosa is the man at the centre of the predicament that South Africans are looking to for a solution.

In a make-or-break election coming up next year, Ramaphosa has been very careful to portray himself as a breath of fresh air from his predecessor from the very same party.

But while he tries to cast himself in a different light from the man who came before him, he would do well to avoid looking like the face behind the fist that squeezes.

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