MAKING CRIMINALS OF HONEST SOUTH AFRICANS

The small matter of R18 is the hill on which taxpayer principles run into state intransigence

“One thing my father ingrained in me is never to lie,” says Charl Kocks, who runs governance assurance provider Ratings Afrika. “As a result, I’ll go to the ends of the earth to make sure I don’t, but it’s got to a stage that this government is turning me into a liar.”

Kocks has been around the block. He began his career designing IT systems for Perskor in 1971, and in 1984 he joined Theron van der Poel (now PwC) as an accounting partner. In 1993, he formed CA Ratings (later sold to Moody’s Investors Service) and in 2007, he joined Ratings Afrika, which measures the soundness of governance at municipalities and companies.

Today, however, Kocks is fuming.

“What we have now is a government that has all the power in the world, and is abusing it. And if you’re citizen 492,000, there’s no way you can argue. You’ve just got to pay whatever bill they send your way, and argue later,” he says.

It’s an opinion forged in the fires of the numerous depressing deep dives Ratings Afrika has made into municipalities across the country. But it’s one that has also been fired further by his recent unsavoury experiences.

Last month Kocks was completing his tax return for last year, and the South African Revenue Service (Sars) provided him with a prepopulated e-filing form, which reflected that he’d earned R113 in interest on one of his bank accounts.

“In reality, I’d only earned R95 in interest, which was reflected on my IT3 certificate from the bank. Sars had made a mistake, though it was for a tiny amount — just R18. But when I tried to change it, I was told by the Sars official I dealt with that I couldn’t. She told me: ‘There’s nothing else you can do,’” he says.

It seems ludicrous that the insignificant matter of R18 should prove to be the hill on which taxpayer principle clashes headlong with government inflexibility. But to Kocks, it meant so much more than a few rand.

“When I filled in the correct amount — R95 — and submitted it, Sars’s IT system reported me as noncompliant to the National Treasury database. And since I do business with state entities, this meant I was barred from continuing to do my work,” he says.

It meant Kocks was stuck. Having run up against a brick wall at Sars’s contact centre, there was little he could do. In the end, his only option was to lie on his tax return, fill in the false interest value and get his compliance status restored, so that he could keep trading. “Through this ineptitude, Sars has made me a criminal, and it couldn’t care less,” he says.

But what really didn’t help his mood was that a few days after this fracas, Kocks received a letter from the City of Joburg, informing him it had just calculated that his property’s value had risen by 49.5% since the last valuation in 2018. So, lucky him: he now gets to pay property rates based on this inflated value.

“This is exactly what happened to me last time and while I objected, it took five attempts and many years to get the true value placed on the property. But the average person is entirely helpless to do anything about it the only response when you speak to these departments is ‘pay now, argue later’,” he says.

It might seem disproportionate to make a fuss of something that began with an R18 standoff but, of course, it’s about far more than just Kocks’s battle. The real amount in aggregate, affecting houses across the country in dicey valuations and administrative assessments, will run into the plenty of millions.

He’s not the only one battling this sort of extractive state overreach, with zero ability to ensure flawed administrative decisions are reversed.

Municipalities, particularly the City of Joburg, routinely levy the sort of valuations which suggest their in-house valuers aren’t averse to the odd dalliance with hallucinogenic substances. And while there is a window for objections (which closes at the end of March), in many cases these objections are simply ignored.

It’s this nonchalant dismissal of legitimate complaints which causes honest taxpayers such as Kocks to lose it, especially since this sort of administrative bungling typically involves them being rumbled for more cash and not being erroneously refunded.

Asked about this by the FM, Sars commissioner Edward Kieswetter said he can’t comment on a specific taxpayer case, but offered to personally establish the facts of Kocks’s case.

“We will focus on the substance to resolve genuine taxpayer service issues and not be distracted otherwise,” he said. “We take serious criticism to heart and work hard to improve.”

Kieswetter only took over in 2019, and has done well to rebuild the tax agency, partly by being responsive to the public perception of the tax agency. He is, for example, well aware of how critical it is that South Africans trust that when they hand over their income to the government, they’ll be treated fairly.

This is vital since, as Kocks put it in a letter to Kieswetter this week, “Sars and other state bodies are losing the willingness of law-abiding citizens to keep trying.” And that’s not a place any state-run tax body wants to find itself at.