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In America the population is collectively on edge at
tax time because 140 million people file tax returns out of a total population
of 310 million. Of course not everyone who files, pays taxes, but at least
all these folks share in the annoyance at filling out (or paying someone else
to) the ever-changing, mind-bogglingly complex, 1040 form.
Here in South Africa, I learn that the South African
Revenue Service just announced that there has been a 13.8 percent increase in
the number of tax returns filed. A record of just over four million tax
returns were filed, up considerably from just over 3.5 million in 2010.
South Africa’s total population is well over
50 million. So less than 10 percent of SA’s population is paying for
the other 90 percent. But of course, individual taxpayers only cover 35
percent of the government’s budget, while 45 percent comes from the VAT
(value added tax) and corporate taxes.
On the other hand, the five million taxpayers likely
pay most of the VAT and as Business Times columnist Stephen Mulholland points
out, “the more prosperous among the five million also relieve the state
of the burden of health costs, education for their children and, in many
cases security in their homes.”
The last place you want to go for health care is a
government hospital, I’m told, and the walls around the home where
I’m staying in Johannesburg are a good 10 feet high, with electric wire
at the top. The neighbors have a generator anticipating the frequent power
outages.
Roughly one million people work for the South
African government, so after those people are netted out, it is really four
million people paying for a South African government that spends 50 percent
of its budget paying its one million workers. And, while public workers have
enjoyed wage increases, SA’s infrastructure crumbles, as little is
budgeted for providing the services government insists on providing.
Living in South Africa means learning to live with
sporadic brown outs, despite rate hikes of 25 percent each of the last three
years. In every city we have visited, the power has gone off for extended
periods of time, making it especially uncomfortable, for instance, in
sweltering Durban.
But while our hostess is extremely annoyed at her
government’s ineptness at keeping the lights on, there just
aren’t enough taxpayers like her in this democracy to carry any weight.
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