News / South Africa

Yadhana Jadoo
2 minute read
3 Nov 2017
5:10 am

Wasted tax money will anger citizens – expert

Yadhana Jadoo

The government’s financial management of its people’s money has tracked negatively over the past two years from 22% in 2015, to 23% in 2016 and now 27% in 2017.

Photo: SAPS

Frightening figures of irregular expenditure by government – at R46 billion – and an expected tax revenue shortfall of R50.8 billion will only further anger citizens and fuel the call for a tax revolt.

With South Africans becoming increasingly frustrated by a volley of reports on corruption and state capture, the current figures, as announced by Auditor-General (AG) Kimi Makwetu and Finance Minister Malusi Gigaba, directly show the mismanagement of taxpayers’ money.

“Apart from the size of the irregular expenditure, the further worrying factor is the upward trend from 2014-15 to the current figures,” Tertius Troost, tax consultant at Mazars, said.

“If this continues it will further anger taxpayers, who will increasingly feel that tax money is being mismanaged, and in certain circumstances misappropriated. This could fuel the call for a tax revolt by taxpayers.”

The figures further show that better management of state funds could go a long way to decrease, or at a minimum maintain, the budget deficit, he said.

“A disturbing element was the sectors with the highest irregular expenditure, namely health at R11.7 billion, transport at R6.3 billion and education at R6 billion.

“These are critical sectors to any economy and the deterioration of these sectors could further hamper economic growth, expected to be as low as 0.7%.”

The Organisation Undoing Tax Abuse (Outa) added that it believed the worsening trend displayed growing neglect of the state’s role in serving the country’s people.

The government’s financial management of its people’s money has tracked negatively over the past two years from 22% in 2015, to 23% in 2016 and now 27% in 2017 when it comes to government audits, which are either qualified, adverse, disclaimed audits with findings or are outstanding.

“This is a serious concern to Outa, as it signifies a government which is lacking in discipline and financial hygiene when managing the public’s taxes,” its chairperson Wayne Duvenage said.

“We are not surprised by the growing calls for a full blown tax revolt and this must now be seen as the biggest threat to the nation’s economic stability.”

Irregular expenditure is the space where corruption and maladministration takes place, he continued.

“This alarming growth in irregular expenditure is a flagrant abuse of taxpayers’ money and displays a government that has adopted a very relaxed and careless attitude when it comes to wasting taxpayers’ hard earned money.

“According to the auditor-general , the root causes of this grossly negative trend is due to the worsening situations of key position vacancies, a lack of competence and inadequate consequences for poor performance and transgressions.” – yadhanaj@citizen.co.za

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