Wed, 13 Nov 2019

A tax revolt will hit everyone's pocket - analyst

News24
23 Oct 2019, 16:13 GMT+10

While public frustration may spark a tax revolt - and perhaps draw attention to matters of public concern in the short term - the long-term impact of this method of protest is questionable, a tax expert has warned.

According to Mazars tax partner Bernard Sacks, not paying taxes is ultimately detrimental to the fiscus.

Sacks was speaking at a briefing ahead of the mini budget, set to be tabled in parliament by Finance Minister Tito Mboweni later this month. Among the predictions shared on the mini budget, Sacks also weighed in on the possible impact of a tax revolt.

Eskom, weak tax to raise South Africa's budget gap to decade high

Such high earners are often big spenders in the economy, Sacks commented.

This means if they leave, VAT will also go down, and if they move their businesses abroad, this will also leave a hole in corporate income taxes.

"So corporate income tax will go down and employment would go down," he warned. "We're not just losing personal income tax, it [emigration] will have a ripple effect through the economy."

Mazars national head of tax services Mike Teuchert added that a lot of these emigrants have investments, and rental properties on which they pay taxes. "By alienating those people and then changing their tax residency, we will lose investment... we're potentially losing tax on other income they can generate," Teuchert said.

Sign up for Sudan News

a daily newsletter full of things to discuss over drinks.and the great thing is that it's on the house!