95 percent of respondents in a survey conducted by business group Sakeliga say the government’s handling of the COVID-19 pandemic has decreased their willingness to pay tax.
Sakeliga released the survey’s outcomes on Monday. It was conducted between 3 and 6 August via an electronic questionnaire sent to 40,000 Sakeliga members and via social media. A total of 883 respondents participated in it.
Sakeliga CEO Piet le Roux warned that a new normal in tax willingness is emerging. “The new normal for tax willingness is going to be much lower than before. We recommend that government and analysts compensate for this trend in their estimations of future fiscal deficits. Businesses are becoming unusually motivated to decrease their tax payments,” he said.
Deferred tax payments
The poll also asked respondents if they would support a campaign that encourages people to defer paying their taxes, as far as is legally allowed, to protest against the lockdown’s restrictions.
“Slightly more than 88% of respondents indicated that they would support such a campaign. Only about 3% would definitely not support it. Of the participants, 4% were unsure about this and a further 3% withheld feedback (would rather not answer) and about 2% made other comments,” Sakeliga found.
Illegal tax protests
Sakeliga asked the respondents if they would support an organised campaign to withhold taxes, even if such a campaign is illegal, to protest against the lockdown.
It found that almost 62% of respondents would support such a campaign, 12% would not, 17% were unsure and 5% would rather not answer the question.
The government has faced heavy criticism for restrictions that have crippled businesses, such as the cigarette sales ban which is still in place. Some restrictions, including on e-commerce and personal care services, have since been lifted.
Le Roux said besides the lockdown, other factors such as corruption, harmful government policies and mismanagement of public funds weighed heavily on businesses’ willingness to pay tax.
“This moral dilemma is weighing with increasing burden on businesspeople in South Africa: they consider it their duty to serve and fund the common good, yet they increasingly view tax as detrimental to society because of how it funds mismanagement, corruption, and harmful policies,” he said.
The government has been rocked by reports of alleged corruption and political patronage in the procurement of COVID-19 personal protective equipment (PPE), especially in Gauteng, Eastern Cape and KwaZulu-Natal provinces.
This prompted President Cyril Ramaphosa to sign a proclamation in July authorising a Special Investigating Unit (SIU) probe into all COVID-19 procurement processes.
He also appointed an inter-ministerial committee last week to compile and publish details of all COVID-19 contracts and tenders “to promote greater transparency and accountability.”