Monday, August 17, 2009

'Tax hikes coming'

We knew this was coming. Empty promises to buy votes have a price. The recent riots was a reminder for the ANC from their voters to pay up. And you, the beleaguered South African taxpayer gets to face more beat down. Go ahead, scream, now, in your office, bugger your workmates.

The following stat is astounding said in the context of a population of almost 50 million, "1.2 million of these [taxpayers] pay 75% of all personal and company tax collected." Or as the article states, one taxpayer supports two people on grants. Unsustainable. This is Julius Malema Maths 101.

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The tax burden on South Africa's few million taxpayers will ramp up by about another 9% to fund government's grandiose plans for social grants.

There are only 5.3m taxpayers in the country and 1.2m of these pay 75% of all personal and company tax collected.

"These people will be expected to fork out an extra R210bn to finance the government's proposed social security fund (National Security Savings Fund), national healthcare (National Health Insurance) and a basic income for the unemployed.

"This will increase government expenditure from about 31% to more than 40% of the gross domestic product, and the tax burden of only a few million people from 27% to 37%," observes Economists.co.za Economist Mike Schüssler.

"This is unsustainable for a country with the smallest number of taxpayers and the highest rate of taxation," he argues.

During last week he participated in a panel discussion on the affordability of the National Security Savings Fund designed by Old Mutual Actuaries & Consultants (Omac).

According to Schüssler's calculations, the National Security Savings Fund will draw an additional R80bn a year from the fiscus, the National Health Insurance R80bn, and the basic income grant R50bn.

As matters stand, South Africa is already the country with the highest proportion of people depending on social grants.

Currently 13m or 26% of the population depend on these grants.


In other words, each taxpayer is responsible for two people's social grants.


The government's plans for an income grant to the unemployed will add another seven million to the list of dependants.

A spike in taxation and contributions to retirement and medical funds is unavoidable if the plans for a social security fund and the national health plan are to be realised.

Schüssler says that in 2006 R84bn was paid out in old-age pensions to 2.4m recipients. This figure could double within the social security fund.

Selwyn Jehoma, another panel member and head of overall social welfare at the Department of Social Development, disagrees on what the social security fund will cost.

He says the social security fund will not involve the fiscus in additional expenditure because more people will be contributing. He estimates that seven to nine million working in the formal sector will contribute.

"Initially it will cost money to set up the infrastructure, but within the first five to ten years enough money will have been accumulated in the fund to finance the payouts."

One of the biggest challenges the National Security Savings Fund will face is how to prevent the rich taking advantage of the poor's savings. The death rate among the poor is high, and this will mean that they do not need retirement funding. Depending on how the fund is constituted, contributions by the poor will benefit the rich.

Jehoma reckons that about seven million will qualify for an income grant.

Schüssler says the national health system will cost up to R200bn. Currently the government is spending R52bn on healthcare and R74bn is being contributed to medical schemes.

This, he says, could cost R3 000 to R4 000 a month. For people in the lower income groups who are currently paying no tax at all this would absorb half of their salaries.

- Sake24.com

7 Opinion(s):

Anonymous said...

Could the three people left in SA who cannot see that we are totally FUCKED please report back to the asylum. Your strait-jackets are missing you!!!

Doberman said...

@ anon 4:30, LOL.

Exzanian said...

Schussler: "This is unsustainable for a country with the smallest number of taxpayers and the highest rate of taxation," he argues."
It is not! You imperialist pig Shussler, you are a RACIST, Running dog, DA bootlicker, counter revolutionery.

Dachshund said...

And Eskom want another 40% tariff hike this year, and another 40% next year.

It's the wheel that squeaks that gets the grease.

So why don't taxpayers take to the streets and trash everything in sight?

Why don't taxpayers march into supermarkets and munch free roast chicken while our demands are negotiated and finally met?

When are we going to stop taking all of this crap?

White South Africans just don't complain enough. When did you last hear someone refusing to pay for a restaurant meal that was appalling? South Africans cough up, leave politely and don't return. Would that it were so easy with taxes.

Whites need to summon up the guts to take to the streets and refuse to take genocide and shit.

Doberman said...

@ Dach, absolutely right. When is it enough? I see how Aussies get so pro-active over the tiniest things and I marvel that so many people can get so agitated over something so quickly. Democracy in action. The people USING their rights. ONE death in Aus would be enough to set this country ablaze much less 20 000 a year.

If people want to live in South Africa they HAVE to get pro-active, stop waiting for their turn to be shafted or worse, culled, because that's all it is, a culling.

Please folks, you must start getting active. You need to form networks. You need to speak up. You need to take the country and your lives back. The ANC's rule is NOT written in stone. Withhold taxes, withhold expertise, withhold anything they may need and ANY regime can be bent to your will. We South Africans need to start acting united.

Dan said...

Yeah, the time for the white tax payers to go on strike, is approaching fast.

FMCLAW777 said...

@ doberman, great comment my friend, you hit the nail on the head, we need to complain more, stand up more and fight for our rights. The issue is when we do, we are racist apartheid lovers, we are at the back of the line when it comes to receiving but first in line to pay the way for others!

Where does one begin though. If we form a UNITED NETWORK and most of us are white as we pay most of the tax anyway, we will be labelled racist and excluded from society.