More citizens taking cue from corrupt leaders, survey reveals
• Tax compliance is bound to deteriorate in a country where respect for the law is decreasing
Seven out of 10 South Africans would change their vote if they thought the political party they support was enabling corruption. This is a finding from the most recent South African Citizens’ Bribery Survey, which surveyed almost 5,000 South Africans across the country.
Although the survey is only in its third year, the findings are illuminating because they paint a picture of a country where bribery and corruption are increasingly normalised and economic hardship is rife.
What is particularly interesting is that as much as South Africans are opposed to corruption in the government, they aren’t above engaging in a little light bribery themselves.
Of those surveyed, 37% knew someone who had been asked for a bribe in the past year and more than a third said “no” to paying a bribe in the past year. These two figures have increased from 2016 – up 4% and 8%, respectively.
A quarter of respondents said they knew someone who had paid a bribe. It’s always tricky to extrapolate, but on a reasonable sample such as this, the finding suggests that as many as one in four South Africans have paid a bribe in the past year. Let that sink in.
The largest proportion of bribes paid were traffic-related (57%), but people also paid bribes to secure a job (14%), to receive a public service (8%) and to avoid police or criminal charges (7%).
Interestingly, the average bribe decreased from R2,200 to R1,550 — a sign that times are tough, no matter which side of the fence you are on.
The average amount for a traffic-related bribe was R205. This was also the first time that bribes for police matters and criminal charges were among the top five most common type of bribe paid.
The findings make for fascinating reading but they also paint a wider and more worrying picture of a country in which respect for and adherence to the rule of law is dwindling.
It doesn’t require much of a leap to see how attitudes towards corruption and bribery in the government have filtered down to the person on the street. This should be a concern for anyone trying to raise an additional R30bn in tax in 2018, because what this survey shows by proxy is that white-collar crime is already endemic in SA and is likely to get worse.
Unsurprisingly, this week’s announcement that the Treasury is looking to implement an additional R15bn in tax increases on top of the R15bn in tax measures already mooted for the 2018-19 fiscal year has raised the ire of more than a few lawabiding taxpayers.
These measures form part of a grander plan aimed at further fiscal consolidation in response to the concerns raised by ratings agencies about SA’s growing public debt ratio. But one has to wonder how successful they will be in achieving it.
There has already been a lot of talk about a potential tax revolt in SA, and it is not hard to see why. The bulk of the state’s gross tax revenue comes from personal income tax, with the remainder made up from indirect taxes such as value-added tax (VAT) (35%) and corporate income tax (17%).
According to Africa Check, the latest Treasury estimates suggest that 1.9-million individuals are expected to contribute an estimated 80% of income tax. If you’ll forgive me an inference leap that Africa Check would probably not approve, we can assume from the survey that 25%-35% of those 1.9-million have already engaged in some sort of bribery.
If that is the case, it is not too much of a stretch to think they would be willing to engage in a bit of light tax evasion too. After all, the same behavioural rationalisation applies to both: no one is directly harmed when a motorist offers a traffic officer a nice “cool drink” when they get stopped without their driving licence, in the same way that no one is directly harmed when you neglect to declare some of your cash income.
Already we have seen a sharp deterioration in revenue collection, which has resulted in an expected R50.8bn shortfall in tax collections in the current financial year.
This is the highest shortfall since the international financial crisis in 2008-09. And things are likely to deteriorate further in the face of continuing and worsening disclosures about corruption and state capture.
When you hear that Eskom wanted an extra R24m to buy 9,217 “operator and visitor chairs” on top of an existing R72.7-million contract to supply office and “soft” chairs, it isn’t surprising that people are struggling to find a moral reason to continue paying their taxes.
In the medium-term budget policy statement Finance Minister Malusi Gigaba almost pleadingly raised concerns around tax compliance and “weakening tax morality”. He also said fairness and integrity of the tax system was critical for the deep social contract between the government and the people. It’s hard to understand how he missed the irony in all of this.
Gigaba also warned that “behavioural responses to tax increases may be larger than anticipated and revenue could perform below expectations even if taxes are hiked”.
In other words, what he said in the medium-term budget policy statement was “hiking taxes is likely not to work”, and what he said this week was “but we’ll do it anyway”. It really boggles the mind.
Luckily for Gigaba, it would seem ANC voters suffer from the same level of cognitive dissonance he does. If seven out of 10 South Africans really do change their vote if they think the party they support is enabling corruption, the ANC will be voted out in 2019.
THERE HAS ALREADY BEEN A LOT OF TALK ABOUT A POTENTIAL TAX REVOLT, AND IT IS NOT HARD TO SEE WHY