The purpose of this blog/site is to provide information about South African tax laws to small businesses and individuals, in a simple format, in order to assist you to understand and pay the right amount of tax. If you have a question, put it in the comments box and I’ll try to answer it in a future article.
The question that must first be answered, however, is why pay tax at all? There are those who would argue that the money is squandered or stolen and they will do anything in their power not to pay.
There are two compelling reasons why we should pay our fair share (remember, tax is levied based on earnings ie ability to pay, so those with more pay more):
- As a person earning any income in South Africa, you and I are currently among the lucky few. Despite the levels of corruption we hear about in the government, as well as the protests about inadequate service delivery, we still benefit from the goods and services that our taxes go to pay for…..so do those who are unfortunate enough not to be earning and it is important that we ensure the money is available to assist them to survive. (Remember, almost 18mn aged or disabled men and women, as well as children, live on government grants in South Africa). It is thus our civic duty to pay our taxes. It is the social contract between us, as citizens, and Government that we pay for and they provide the public goods (schools, hospitals, police, roads etc.). If we don’t keep our end of the contract, how can we expect them to keep theirs. This is “the carrot”.
- Then there is “the stick”. If you don’t pay all your taxes and the South African Revenue Service finds out, you can be charged the tax and up to twice the tax again (you end up paying the amount up to 3 times!) plus SARS can charge interest on the outstanding amounts (you end up with less than nothing). Lying about what you earn can also result in you being charged with fraud (criminal charges) which might also mean you go to jail. Some say “they’ll never catch me”. These people are living in a bygone era. With technology advancing at speeds we can’t even keep up with, and a new tax Commissioner who will want to prove his worth, such hopeful phrases are misguided. If you are one of these people, this blog/site is not for you. Otherwise I hope you will find it useful.