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Ferial Haffajee: An abused nation welcomes a tax boss. Why? This is not normal!

Mar 28 2019 18:35
Ferial Haffajee

The national salutation that greeted Edward Kieswetter’s appointment as SARS commissioner on Wednesday night is the oddest thing.

You have to ask yourself: why? In normal societies, the tax boss is neither a rock star nor a symbol of a nation’s moral rectitude, nor does he or she represent a society’s institutional strength.

No, a tax man is not somebody to like, in a normal society. Tax morality or integrity is only something a good society achieves in relation to a working social contract.

You pay your tax and you get good services or value for your tax; in addition, taxes are redistributed progressively from the wealthy to those in need, in order to break inter-generational poverty. That is the fundament of a decent society.

It is, for example, at the heart of the social solidarity system that keeps returning the Scandinavian countries to the top of the leader boards of global well-being across a range of indicators.

South African taxpayers, in the main, have given up on a working social contract. The tax system has become more progressive over the years, which means most tax is paid by the middle-class, which gets almost nothing in return: each middle-class family, I’d guess, is a walking government in and of itself.

If you fall into this class, you pay for your children’s school fees, for your own security, for your own healthcare and, increasingly, for your own electricity and perhaps even water. Wherever the state has to deliver to all its citizens, it is failing; and taxpayers keep paying because SARS is about the only institution that has kept on working through the decade of state capture, despite the best efforts of cronies placed into it.

Capture

SARS was, of course, captured by the patronage networks and alliances around former President Jacob Zuma who placed a member of his kitchen cabinet or engine room to head it. Former SARS Commissioner Tom Moyane began to negotiate tax settlements on his own, and there is now ample evidence in the public domain to show how it was steadily being corrupted. The various mafias were happy to have a compliant leadership back after the tough disciplines installed by Pravin Gordhan, the first democratic era tax commissioner and the man largely credited with building a world-class revenue authority.

The EFF, which has promised to fight Kieswetter’s appointment, is in the thrall of one such mafia, so I would not pay particular attention to their latest disinformation campaign against efforts to fix SARS.

With his crack team, Gordhan put the poker on the mafias and had them on the run, whether they were in the cash retail business, illicit cigarettes or other parts of the economy where tax compliance was low.

Revenue tanked so much in the capture years that this is one reason South Africa’s investment grade rating is threatened, but through it all, the middle-class taxpayers and all of us VAT payers continued to cough up ever-higher taxes as service levels went down across all three levels of government.

New sheriff

Now, all of us, including the abused taxpayer, are clapping because there’s a new sheriff at SARS. It’s odd, and a sign of the abused taxpayer. Kieswetter is a polymath: a builder, an engineer, a former CEO (of Alexander Forbes) and the executive who crafted the SARS Large Business Centre (LBC), which devised ways to make blue-chip companies more compliant and to pay on time to keep the wheels of state turning.

One of the first things Moyane did was to break the LBC to begin to personally oversee tax settlements – a corruption red flag like no other.

Kieswetter was also a banker, so he knows his way around numbers. I once interviewed for a role at the Banking Association where Kieswetter was boss; he was so stern and disciplinarian that I hot-tailed it out of there before properly starting. These are good qualities to have in a SARS Commissioner, and for the institutional health of the revenue collector, he is great news. 

But for taxpayers, the appointment is neither here nor there. For us, the proof of the pudding must lie in how the social contract is reconstructed, so that it is no longer a one-way relationship of paying and seeing the money going into the pockets of politicians or down the drain of inefficiency.

The only time I’m going to clap is when our tax is efficiently and fairly collected and when it is spent on making my country better across all measures set out in our glorious Constitution. And also when the roads, schools, traffic lights, hospitals, dams, municipalities, clinics and Eskom work properly.

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