‘Unwise’ call for tax revolt could lead to criminality, says Mark Kingon
Kingon says about 17-million people receive social grants from the government and a tax revolt could have dire consequences for those in need
Calls for a tax revolt are unwise and could be viewed as advocating for criminality, acting SA Revenue Services (Sars) commissioner Mark Kingon said on Monday.
On social media at the weekend, Western Cape premier Helen Zille threatened to organise a tax revolt if those implicated in corrupt dealings and state capture were not prosecuted soon.
The threat was not well-received well by the revenue service, which is emerging from a tumultuous period in its history, after the disastrous tenure of former commissioner Tom Moyane.
The Moyane years culminated in a R100bn hole in revenue collection. Finance minister Tito Mboweni had also cut the forecast for revenue collection for the next three years by R85bn in his medium-term budget policy statement in October, due to lower growth and unexpected value added tax refunds.
It is tough terrain for Kingon as he continues to turn the tax agency around. Calls for a tax revolt could further dent attempts to restore the confidence of taxpayers, which the institution desperately needs.
In an interview with Business Day, Kingon it was “inadvisable and very unwise” to begin debating a tax revolt in a country with developmental needs such as SA's.
He acknowledged that billions were being lost to corruption but said there were transparent and active steps being taken to eradicate that. Kingon said about 17-million people received social grants from the government and a tax revolt could have dire consequences for those in need.
“I believe it would damage democracy. It is inadvisable to propagate for nonpayment; in fact, it is advocating for taxpayers to commit criminal offences,” he said.
Nonpayment would have a knock-on effect on the economy and business itself would suffer should it elect to withhold its taxes. For instance, businesses would battle to receive tenders or do business as they would not receive tax clearance certificates.
Kingon said Sars was also not “sitting idly by” as allegations of malfeasance were exposed daily at the state capture inquiry, chaired by deputy chief justice Raymond Zondo, and in other inquiries.
“Each bit of evidence may not yield results immediately, but we will, without fear or favour, ensure that these matters are investigated and that the tax law is applied for the benefit of the country,” he said.
Kingon said Sars was rebuilding the capacity to investigate the allegations where they related to the mandate of the revenue service. For example, it has re-established its illicit economy unit.
Lifestyle audits are also among the avenues the revenue service can pursue to ensure those implicated pay their dues.
Kingon declined to comment on revenue collection for the past tax season, saying this would be announced by Mboweni in the upcoming budget, but did say it was “tough going”.
“Obviously, given the medium-term budget last year, its been tough going. We have been needing to do far more with far less," he said.