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Monday, November 3, 2014

South Africa Taxpayers Fund Government Laxity

Finance Minister Nhlanhla Nene of South Africa needs money, and it would ultimately be the taxpayers that would fund Government laxity. An amount of more than ZAR44 billion was required by government, and Nene has promised to raise taxes over the next three years. There is no indication of how taxes would be raised, and it is assumed that personal taxes, increase in Value Added Tax (VAT) and companies’ taxation would form part of the increased structure.

The Davis Tax committee would make recommendations before the February 2015 budget, and it is expected that the Finance Minister will consider proposals for tax increases. Earlier this year reports indicated that losses through VAT fraud amounted to almost ZAR24 billion annually. Raising the VAT amount would have a detrimental effect on the poor. A huge annual tax loss through corruption was highlighted.

VAT fraud remains a major concern and improving the structure would assist in funding the government’s budget plans. Informal traders, street vendors and taxi drivers rank among the highest VAT evasions. Crime, fraud and corruption within public and private sectors continue to dent the loss of revenue for state coffers. Perhaps the biggest loss of revenue for the state treasury is the wasteful expenditure within government departments. Astronomically high entertainment and travel claims account for the loss of income.

Opposition parties in South Africa commented on the mini-budget this week confirming that overspending is a cause of concern. The Democratic Alliance (DA) official opposition party stated that the higher rate of growth from other African countries outpacing South Africa tells the story of ineffectiveness. The DA expressed disappointment that no mention of reducing the current cabinet size was planned. Wasteful expenditure was ignored pointing to no cuts in government spending, thereby placing an additional burden on the taxpayers.

The Economic Freedom Fighters (EFF) wants the government to deal with tax evasion and improve on service deliveries. Capital shifting, base erosion and transfer pricing issues needed attention as the EFF said this caused millions to be lost in revenue.

The National Freedom Party (NFP) wanted Nene to address the service delivery protests presently destroying the country. The corruption and loss of ZAR30 billion unaccounted for and wasted was not mentioned. NFP wants investigations into wasteful expenditure, and corrupt officials dismissed and charged from crimes committed.

Academics indicate that tax increases should not be the preferred way to shore-up government finances. There is a call for spending cuts including reducing the Zuma cabinet that costs ZAR65 million annually. Curbing the growth of the civil service sector and controlling salary increases.

Creating jobs would raise revenue, and this would be an ambitious plan for government to indulge. The promise of creating employment by President Zuma never materialized as indicated in the election manifesto. Unemployment figures remain high and place an additional burden on government funding.

There is no money, and the government is scrapping the pot, it is indeed a worrying factor for taxpayers who foot the bill of wasteful expenditure. It is too little, too late for a decent recovery to expand on the growth.

New Guardian LV article - read the entire story -

Saturday, November 1, 2014

South Africa No Place for the Minority Group

There is no place for the minority group of Afrikaners in South Africa. Over the past twenty years, the cultural and Afrikaner rights have been suppressed. Political isolation and the violent attacks against farmers in particular cause evidence of the diminishing rights of this minority group.

South Africa is a diverse country with over 11 official languages and defined as a rainbow nation. There is nothing more or nothing less than defining the nation along racial lines. Racial classification is experienced, and diversity is ignored. The promotion of minorities and rights for Afrikaners remains an inconvenient truth.

The majority of Africans believe that Africa is the home of Africans and not of white settlers. Afrikaners are not considered an African tribe. The indigenous African people believe that any white has never been denied the right of self-determination and oppression. It is an aim that the white settlers were never invited to South Africa and the rest of the African continent. The settlement of whites has caused this group of people to become a minority in the new South Africa.

It is another belief that the majority of white settlers in South Africa were a direct cause of the overcrowding, political intolerances, religious and economic reasons that drove the settlers to the African continent. The indigenous people believe with the white settlers came the dreaded same conditions that drove them away from original countries.

Many Afrikaners want a separate state within South Africa. The minority group wants a state where self-determination and the right to practice cultural rights without the continuous crime and discrimination. There is the conviction that Afrikaners are dominant and have exclusive rights to choose any area within South Africa. The majority proclaim the right of Afrikaners to continue exercising hatred toward Africans remains unchallenged.

The majority believe that South Africa is a country where all have rights to live free of racism. The issue of tribalism is no longer an issue as racism remains the greater practiced. Living alongside the diverse cultures is indeed a challenge. There is no freedom from racism, and this will forever remain problematic within the Rainbow Nation.

Every functioning democracy needs a balance between left and right and perhaps the idea of a separate state for the minority is not a recognized solution. More importantly is the protection of different cultures and the rights of minority groups. Without support, it is easy for the majority to bully the minority groups.

Racism works equally well on both the left and right side. It is the promotion of rights and protection of cultures of the minority groups that needs to be applied. The government supports unity and integration.

Another article published on the Guardian LV - be sure to read the entire report.

South Africa and the Draconian Laws of the Revenue Services

The South African Revenue Services (SARS) have implemented draconian laws in an attempt to recover taxes from companies and individuals. The law gives SARS the right to take money from a bank account without permission from the account holder. It is a harsh code of laws that can have detrimental effects on people who already struggle to cope with the high cost of living.

South Africa has a population of approximately 53 million people, and it is estimated that 11 million people file tax returns annually. A staggering four million of the registered taxpayers are exempt from tax due to the tax threshold, leaving the burden of tax payable on nearly six million people. Of course, the collection tactics are severe considering the low number of taxable people in South Africa.

In South Africa, informal traders, such as street hawkers and taxi drivers evade the tax system. Although evasion is not limited to the informal sector, a moderate number of high-income earners and business owners have options to bypass the taxation. Small business owners claim that business and individual tax are one of a kind does span across both formal and informal taxpayers.

Jacob Zuma, the president of South Africa has mentioned that taxes will increase, and there are indications that high-income earners will bear the highest tax burden. The informal sector growth will continue to find a way of avoiding the rule of tax by neither breaking the law, but rather will use an intelligent attempt to circumvent the tax plan. The strict labor laws and lowering of personal taxes can close the widening gap between the formal and informal taxpayers.

The power of certain SARS officials allows for searches without warrants, collecting information from banks, estate agents, medical funds and lawyers. SARS can exercise an aggressive approach in dealing with tax avoidance or tax evasion. The amount of information SARS can demand are staggering since the new regulations have been passed. The dynamic approach used by SARS is to tighten the net of non taxpayers and tax evasion in South Africa.

New article posted on the Guardian LV - be sure to read the entire article

Friday, October 31, 2014

South Africa: Where Has All the Money Gone

The African National congress (ANC) ruling party of South Africa, has financial woes as all the money is gone. The possibility of retrenching staff members is highlighted and can be a reality in the near future. Staff has not received salaries for two months as the party suffers from money problems.

The Secretary General Gwede Mantashe admitted this week that there were problems and the ANC party was in dire need of money to meet all obligations. One of the reasons cited for the decrease in cash, flow was the loss of 16 parliamentary seats in the past May 2014 general elections.

Angry staff working for the ruling party demanded salary increases and Mantashe stated that there was no money for increases or bonuses but the party would consider options when matters improved. Mantashe told staff members to be patient during this terrible time.

Raising funds from private investors had declined, and the ANC party has been threatened with liquidation from angry suppliers. Millions of rands that are owed for services rendered to the ruling party, remain unpaid to service providers.

The revelation of the ANC financial woes came from members who preferred to remain anonymous. During a heated meeting at Luthuli House, Mantashe said the staff members about the financial woes. The staff members were told that if they were not happy with the situation they were welcome to go and find alternative work. Staff members are demoralized and insisted that no increases or bonuses were paid over the past three years. The news of wanting to retrench staff members was received with hostility. Mantashe denied reports that the ANC were planning staff retrenchments.

New article on the Guardian LV -
Read more at http://guardianlv.com/2014/10/south-africa-where-has-all-the-money-gone/#M1ZwW5MRg6jysg1F.99

My thoughts, the thieving, corrupt, criminal elements of the ANC have taken it all. Greed is a sin.......

Tuesday, October 21, 2014

P.W. Botha Dragged into Nkandla Debacle

The former president of South Africa, Pieter Willem (P.W.) Botha is being dragged into the Jacob Zuma Nkandla debacle. Zuma has referenced the former president to the ongoing Nkandla upgrades that have been symbolized as waste of taxpayers’ funds. The R246 million spent on upgrades has caused an outrage of comments by both opposition parties and the public.

The vast sums of money spent on Nkandla the private property of Zuma, the president of South Africa has cast a shadow of incompetence in the public eye. The state provides for official accommodation, and transport to ruling presidents, Nkandla remains an individual homestead. The expenditure on security updates at Nkandla vastly exceeds the value of the property and that spent on former presidents of South Africa.

The Frederik Willem (F.W.) De Klerk Foundations said the comparison of Nkandla to the George Airport raised some disturbing questions. It is a question to determine the distinction between appropriate state expenditure on legitimate plans and disbursements spent on Nkandla that will result in Zuma’s inexcusable enrichment

At a media luncheon this week, Zuma said the airport built-in George was not for economic reasons, and built to serve P.W. Botha, who lived close to the airport. Zuma said the criticism over Nkandla was unnecessary and raised the question, “Is Nkandla not meant to produce a president?” Zuma said the state had a responsibility to protect the president.

Botha served as the last Prime Minister of South Africa from 1978 to 1984 and became the first State President of the country from 1984 to 1989. The wilderness situated in the Western Cape was home to the president and close by George Airport, formerly known as P.W. Botha Airport was built in 1977.

A discovery of natural offshore gas was found during 1969 in Mosselbay, and this led to the development of a refinery. Located close to the George area, the airport construction served to enhance the expansion of gas to liquids. The airport was built during P.W. Botha’s tenure as Minister of Defense, and this was built in a strategic position. The state-owned company struck gas during 1980.

Any state action that results in the enrichment of political officers is inherently wrong and not acceptable. The remarks emerged from President Zuma raise the concern of sensitivity to criticism over the wasteful expenditure at Nkandla. It raises the government’s failure to accept the credibility of organizations findings on the Nkandla issue.

Published on the Guardian LV - read more at
http://guardianlv.com/2014/10/p-w-botha-dragged-into-nkandla-debacle/#9U4WvM2DyB4tT1YY.99