GOVERNMENT IS DANCING ON THE GRAVES OF SOUTH AFRICAN CITIZENS

THE ANC GOVERNMENT IS DANCING ON THE GRAVES OF SOUTH AFRICAN CITIZENS

This is how much of the tax payers money is wasted by the ANC Government   

Stes de Necker

Much has been said about the cost to upgrade South African president, Jacob Zuma’s Nkandla residence, with chants of “pay back the money” still echoing down the corridors of Parliament.

And while the likes of The Economic Freedom Fighters and the Democratic Alliance have used Nkandla as a political football to win votes, a relatively innocuous sum of money – when compared to R700 billion lost to corruption over the last 20 years – has incensed the country’s citizens to a point of frenzy.

The South African public has been bombarded with media reports about government projects or branches using up millions, and often billions, of taxpayers’ money.

These range from irregular and wasteful expenditure at provincial and municipal level, to infrastructure projects which often balloon far past their original budgets.

The figures presented are often way beyond the comprehension of the every-man. So when broken down, how much do these billions of Rands translate to an individual’s direct exposure to them?

Cost Expressed in terms of the South African tax base

While income tax makes up 34% of the fiscus, VAT, company tax and other levies effectively all come out of the pockets of the South African public and business owners.

Determining the exact number of taxpayers is a tricky affair. In May 2015, union Solidarity found that approximately 3.3 million taxpayers paid 93% of all income tax in the country.

This is the figure used for the calculations below, as it comprises the vast majority of tax-payers in the country.

Breaking the tax groups down further, however, reveals that the tax numbers are even more disproportionate – with 1.1 million taxpayers paying as much as 70% of all income tax, according to Solidarity.

To present the data as accurately as possible, BusinessTech selected three groups – the bulk taxpayers; SARS registered taxpayers; as well as all eligible tax payers in the country.

This translates to:

Taxpayers – 3.3 million

SARS registered taxpayers – 15.4 million

Eligible tax payers – 33 million 

This is how much – in theory – that individuals paid in some of the more high-profile cases of public spending or wasteful expenditure in South Africa.

1. Nkandla Security Upgrades

Reported cost	Cost per taxpayer	Cost per SARS registered taxpayer	Cost per citizen
R246 million	R75	R16	R7.50

The security upgrades at President Jacob Zuma’s Nkandla homestead have captured the most attention as an example of the improper use of taxpayer’s money in recent times.

The per person tax burden is however, relatively minor, at R75 – or R75 too much.

2. African Union Fees

Reported cost	Cost per taxpayer	Cost per SARS registered taxpayer	Cost per citizen
R700 million	R212	R45	R21

South Africa pays R700 million a year to be a part of the African Union. In June, the DA challenged the “outrageous” amount, seeking answers as to why the contribution was so high.

Described as a “colossal waste”, the figure splits to around R210 per taxpayer.

3. Prasa Afro 4000 trains

Reported cost	Cost per taxpayer	Cost per SARS registered taxpayer	Cost per citizen
R3.5 billion	R1 060	R227	R106

The Passenger Rail Agency of South Africa (Prasa) hit the headlines when it was found that the 70 Afro 4000 trains it had purchased from Spain earlier this year, did not meet the specification requirements for South African rails.

The trains were purchased for R3.5 billion, which works out to an average individual tax burden of over R1,000 for equipment which the group has admitted, simply does not work effectively.

4. Gauteng wasteful expenditure (2015)

Reported cost	Cost per taxpayer	Cost per SARS registered taxpayer	Cost per citizen
R5 billion	R1 515	R325	R152

It was announced on 1 September that Gauteng incurred over R5.8 billion in irregular expenditure in the 2014/15 financial year – up from R3.8 billion in the previous year.

According to Gauteng premier David Makhura, this was due to a failure to comply with financial management laws in the province.

Translated to individual citizens, this is around an average of over R1,500 per person, that simply cannot be accounted for.

5. Municipalities irregular expenditure (2014)

Reported cost	Cost per taxpayer	Cost per SARS registered taxpayer	Cost per citizen
R11.5 billion	R3 484	R747	R348

In June 2015, the auditor general revealed that 264 municipalities across South Africa had been exposed to a combined R11.5 billion in irregular expenditure in the 2014 financial year.

This includes fruitless and wasteful expenditure, and a multitude of non-compliance issues with procurement. Irregular expenditure refers to monies used or diverted to things they were not intended for.

Split among the tax paying population, this means individuals were directly exposed to about R3,400, on average.

6. E-toll guarantees

Reported cost	Cost per taxpayer	Cost per SARS registered taxpayer	Cost per citizen
R31 billion	R9 393	R2 013	R940

The controversial e-tolling system has been met with visceral opposition since the scale and full financial burden on Gauteng road users came to light.

While Sanral and the department of transport struggle to get the user-pays principal to stick with motorists, the government has meanwhile placed a guarantee of R31 billion in payments for the system, which needs to be met whether Gauteng road users pay or not.

Government has already bailed out Sanral with regards the the e-tolling system, using state funds, meaning that South African taxpayers are accountable for just over R9,300 a head for the full amount.

 7. Public works wasteful expenditure (2009 – 2014)

Reported cost	Cost per taxpayer	Cost per SARS registered taxpayer	Cost per citizen
R35 billion	R10 606	R2 272	R1 060

In 2014, the public works department reportedly lost just under R35 billion in wrongful and wasted construction or leasing of state buildings over 5 years.

If you were paying taxes over that time, this would have come at an average R10,600 individual cost to you.

8. SA nuclear plans

Reported cost	Cost per taxpayer	Cost per SARS registered taxpayer	Cost per citizen
R500 billion	R151 515	R32 467	R15 151

South Africa has entered into agreements with Russian firms to construct several nuclear power plants in the country.

While details surrounding how these projects will be funded are sketchy and obscure, taxpayers will undoubtedly enter into the equation in paying the estimated optimistic R500 billion price tag.

If the entire project comes from public funds, it will be at an average cost of R150,000 per tax payer. If the DA’s estimates of the costs ballooning to R1 trillion become a reality, the burden would double to R300,000.

According to the DA, even if the initial estimate of R500 billion are accurate, the project is not affordable.

9. Corruption (1995 – 2015)

Reported cost	Cost per taxpayer	Cost per SARS registered taxpayer	Cost per citizen
R700 billion	R212 000	R45 000	R21 000

In January, the Institute of Internal Auditors reported that South Africa has lost R700 billion to corruption over the last 20 years.

Breaking it down across the selected demographics, every citizen in the country has, on average, thus spent R21,000 in that time – or just over R1,050 a year.

Spread across bulk tax payers, the figure climbs massively to R212,000.

The above adds up to:

1. Irregular Expenditure  R11,746 Bill.

2. Wasteful Expenditure R575,200 Bill.

3. Corruption                     R700,000 Bill

Total                                    R1,286,946 Bill

That amounts to a staggering R3,526 Bill. per day!

If that figure doesn’t scare you, nothing will.