AYABONGA CAWE: Early trade policies resulted in overtaxing of black communities

Bathurst is not only known for being the home of the oldest operating pub in SA, the Pig & Whistle, which has been a watering hole since 1832. As I recently discovered, it also hosted the first textile mini mill, built by the Bradshaw brothers a decade before the pub served its first pints. And with that, one of the most concerning yet interesting examples of how early trade policy moves in Southern Africa in effect overtaxed those who at that stage had little to no representation.

The building of Bradshaw’s Mill to make woollen blankets and “shoddy” (fibre for stuffing), coincided with a fundamental shift in the material culture of the nearby African communities. Karosses made from tanned hides had been replaced by blankets by the 1870s. This resulted from the growing scarcity of wildlife and followed the “national suicide” of Nongqawuse and the rinderpest epidemic of the 1890s. Blankets would later become to many Xhosa, Batswana and Basotho within the customs union of the Cape, Free State and what was then Bechuanaland (now Botswana) and Basutoland (now Lesotho), what tartans are to Scottish clans.

Blankets were then, as now, used not only to keep warm but also as “national dress” and for ritualistic purposes in rites of passage, as gifts and as markers of birth and death. This introduced a relative frequency of the purchase of blankets among a significant section of the population. Those who drafted the terms of the world’s oldest customs union, the Customs Convention of 1898, recognised this in their own self-interested way.

By the time Natal joined the customs union in 1898 a special 20% ad valorem tax was in place covering “blankets, sheets or rugs, cotton or woollen or manufactures of cotton and wool, commonly used as cotton or woollen blankets or rugs”, which were in the main sold to Africans via wholesalers and white rural store traders.

Picks and hoes also attracted an import duty, unlike other agricultural implements used mainly by white farmers, which were imported duty-free. Add to that red ochre and beads, which were at the time the kinds of imported manufactured goods Africans bought from trading stores. These were examples of “distributionally unjust incidence”, the relative burden of taxation falling disproportionately on a part of the population that enjoyed neither representation nor any meaningfully avenues to raise grievances.

Such taxation continued in the form of regressive poll and hut taxes, and a raft of other permits, authorisations and levies that targeted the black communities in SA right through to the late 1980s, in many instances to finance indirect rule in the form of Bantu and later black local authorities, but fundamentally as a mechanism to finance colonial settler and later apartheid state-formation through taxation of the oppressed.

There was subsequent resistance to proposed or administered forms of taxation, from the Bambatha ka Mancinza resistance in the early 1900s to mass action against the general sales tax of the early 1990s and latterly to the VAT rate discussion in 2018 and the now seemingly successful campaign against e-tolls.

While some carelessly bandy about the view that we are witnessing declining tax morality, it is worth considering the distributional consequences or “burden” of taxation on particular categories of economic actors. The taxes that are levied — or not levied — ought to be aligned not only to shifts in consumption and demand patterns (domestic and foreign) but also to a national strategy responding to a country’s particular stage of development.   

If I compare the tariff schedules and rebate structure (goods that came in duty free) of the late 1800s to the current regime, it is clear that more goods as inputs to manufacturing are imported duty-free under those schedules and also that more protective tariffs have arisen from the growth of secondary industry over the last century.

• Cawe is chief commissioner at the International Trade Administration Commission. He writes in his personal capacity.