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< South Africa's GDP
Economics Main Page >

South Africa's tax morality declining, but due to government wasting tax money

Category: Fiscal policy and e-tolls​​​
Date: 4 November 2018

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We take a look at a article in which Treasury states tax morality in South Africa is impacted by organizations such as OUTA. Rubbish. It is impacted by how you use and spend tax payers money. If you waste it tax morality will decline. And thats exactly whats been happening.
Picture
  • South Africa's GDP
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Tax morality declining, yes it is, due to government wasting collected taxes

Start article
The culture of non-payments in the country will affect service delivery, a Treasury official warned. Treasury on Friday responded to public comments made to the standing committees on finance and appropriations. Earlier in the week unions and civil organisations had called for clearer plans to turnaround state owned enterprises (SOEs) which were weighing down the fiscus. Acting Director General Ismail Momoniat commented on financial management of SOEs and pointed out that there is a pervading culture of overspending, with no consequences.

"Every time you bail out an SOE, every other municipality and provincial government wants to be bailed out," he told members of the committees. "We need to create a culture of compliance with the PFMA (Public Financial Management Act) and the MFMA (Municipal Financial Management Act) … There's a lot of entities today where people think they can overspend and there are no consequences for that," he explained.
  • READ: No holy cows as Mboweni says reconfigure fiscus-draining SOEs
Momoniat recalled that some people got away without complying with the legislation and that there were no consequences. "Even when they were referred to prosecuting authorities, nothing happened," he said. Secondly Momoniat highlighted that SA needs to get the "culture of payment" right. This not just relates to individuals paying their water and electricity bills, but municipalities paying service providers like Eskom and water boards. "If we have a situation where payments are not made, we are entering into dangerous territory. Where people who should be paying don't pay, it will impact service delivery," he said. Momoniat said the Organisation Undoing Tax Abuse is impacting tax morality through its campaign against the payment of e-tolls to the South African National Roads Agency (Sanral) to fund the Gauteng Freeway Improvement Project.
  • READ: Mboweni's 'pay our tolls' remark draws ire of Cosatu, Fedusa
Momoniat acknowledged that Sanral's judgement calls in the past are questionable, but he strongly advised against non-payment of e-tolls. "The fact that advocacy for non-payment is there, has consequences for other services, both in terms of the future of roads and other services where payment is required," he said. In order to build a strong state, we must be careful not to undermine the culture of payments, he added. Treasury allocated R5.8bn to Sanral this year, as there is a risk of the entity calling on its R38.9bn guarantee due to the under-collection of e-toll fees. At a briefing on the mini budget Finance Minister Tito Mboweni told journalists that government wants the entity to be able to access funding from markets as opposed to relying on allocations from Treasury. This means it is important for road users to pay their e-tolls.

Original article can be found here
Lets get one thing straight Treasury. Non payment of e-tolls stems from the fact that government has wasted billions in tax payers money via corruption, ineffective and inefficient spending, fruitless and wasteful expenditure and the likes. Tax morality is not impacted by OUTA's campaign against paying e-tolls. Tax morality of the citizens and the decline thereof was brought about by government. People are no longer blind to the shocking levels of corruption and money wasted. Why should they keep paying taxes when its being wasted? Think of the billions upon billions in tax payers money wasted on bailing out state owned enterprises that has been run into the ground by ANC cadres and corruption. No Treasury and Mr Momoniat, tax morality is impacted by how you as the guardians of the tax payers money use and spend it, and control the spending thereof. It really is that simple.

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