Charles Cilliers
3 minute read
12 Jun 2017
6:31 pm

Mbalula claims 80% of SA tax ‘dependent on whites’. Really?

Charles Cilliers

The minister has used this stat in support of his argument that 'white monopoly capital' is a problem.

FILE PICTURE: Fikile Mbalula. ©Chris Ricco/BackpagePix

A public argument has been raging between former finance minister Trevor Manuel and the current police minister, Fikile Mbalula, about whether “white monopoly capital” (WMC) exists or not.

Mbalula goes to great lengths to spell out his reasons for saying the term is as valid today, 23 years after the fall of apartheid, as it was when Nelson Mandela and Oliver Tambo were leading the struggle.

Among his arguments for the “fact” that South Africa’s economy is still mainly in the hands of white monopolies is his assertion that: “We have over 80% of our tax revenue dependent on whites; this is a monopoly itself. It talks to earnings and who earns what.”

An investigation of the data, however, would make you wonder where Mbalula gets his 80% statistic from. He doesn’t provide a source for it in his Daily Maverick article.

However, a month ago, Africa Check looked into a tweet by the deputy CEO of AfriForum, Ernst Roets, claiming that about 1.7 million people (about 3% of the population) pay about 80% of South Africa’s income tax.

Africa Check eventually concluded that just over 1.9 million registered taxpayers indeed do contribute about 80% of our income tax (remember that’s only about a third of the total), but they made no mention of race.

Roets allowed his followers to assume he was implying that most of these taxpayers are white, but that’s a big assumption given that the black middle class has more than tripled over the past 13 years, while the country’s white middle class has shrunk.

To complicate matters, University of Cape Town marketing professor John Simpson said last year that the black middle class had risen to nearly 6 million people, even adding that “The black middle class is keeping the economy alive … There has been an explosion of the black middle class.”

According to Simpson, the factors driving the surge included greater access to credit, improved education levels, BEE and improved economic growth (though that is now apparently a thing of the past).

Meanwhile, New World Wealth‘s data in 2015 showed that the number of black millionaires in South Africa had almost tripled in eight years, while the number of white millionaires declined significantly (so much so that there are fewer dollar millionaires in South Africa now than there were 10 years ago).

According to them, about 45% of all high-net worth individuals were coming from previously disadvantaged groups at the time, though white South Africans still made up the majority. Chances are, two years on, though, that the figure is now closer to 50-50.

All of this this really makes you question whether white people can still be responsible for paying as much as 80% of all the tax, as Mbalula seems to think. That’s not even taking into account the fact that VAT accounts for a quarter of all our taxes (and everyone pays VAT).

If Mbalula was confused about what Roets tweeted, we should also keep in mind that AfriForum’s man was only referring to income tax, which only makes up about 36% of all the taxes government collects, as previously mentioned.

No matter which way you look at it, Mbalula’s stat just doesn’t ring true, unless most of these rich black people are somehow evading paying tax, which is something the police minister should perhaps fill us in on if he knows about it.

Interestingly, The Citizen ran a poll on our website today to see which of our readers agree with either Mbalula or Manuel on whether white monopoly capital is a fair label or not, or whether it’s perhaps just being used to distract from allegations of state capture by the Gupta family, as we have been hearing for some time.

Polls like these are hardly scientific, but they do give one a bit of an idea of what the general consumer of news thinks about what’s going on.

So despite all my research, I can’t figure out whether there’s any merit to Mbalula’s stat about 80% of our taxes supposedly coming from white people, but based on our poll (at the time of writing this), it would seem 95% of about 300 of our readers appear to think he’s talking nonsense.

Have a look below:

The poll.

The poll.