Can SA survive given the following

[Dave A]

Why do you say its "lop sided".

It basically makes no attempt to tax the cash economy in any way whatsoever. Legitimise a tax free cash economy and watch it grow...

[wynn]

journalist Chris Hayes argues that what happened is this: Our ruling class failed us. Behind the seemingly haphazard pile-up of recent calamities he sees a pattern: In each case, a cadre of Very Important People succumbed to some combination of blinkered groupthink, deception, self-dealing, fraud, smugness, and self-delusion. And in virtually every case, they escaped accountability.

You thought this was about South Africa right?

Wrong

Read more: http://www.rollingstone.com/politics...#ixzz20tbTjUzL

Could be though

[BusFact]

It basically makes no attempt to tax the cash economy in any way whatsoever. Legitimise a tax free cash economy and watch it grow...

Ultimately the goal would be to phase out the cash economy altogether. In the interim it is not tax free as companies would be expected to bank their receipts every day (or at least pay across the tax as if it had been banked - more admin but only by choice), but this would probably be commonly avoided just like cash income is today.

Reduced cash in circulation, regular note changes to ensure deposits, limits on cash allowed to be held, limits on the value of transactions that can be paid for by cash, high cash withdrawal fees: These are all means to discourage the cash economy.

My take is that more tax will be generated once this already "tax free" cash economy is practically eliminated all together. A side benefit is that a cashless economy makes it more difficult to hide ill gotten funds.

[Dave A]

You don't think the cash economy option is the only thing that inhibits banks from raping us more than they do already?

And on companies banking cash - you don't think with a 4.5% saving on the line they might not reconsider their processes?
Look at what lengths many people will go to already to save 1% or less for depositing cash, let alone legally skipping a 4.5% tax.

In the interim it is not tax free as companies would be expected to bank their receipts every day (or at least pay across the tax as if it had been banked - more admin but only by choice)

Changing the rules already? I thought the idea was to have only the banks burdened with collecting, administering and paying over this tax.

[wynn]

The idea of charging a higher VAT instead of personal tax is that most vendors are already registered and the penalty for those in the cash/informal economy that are not registered will be the VAT itself, so it will pay that 'shebeen queen' to be registered as a VAT vendor (who can afford to kiss R12280.70 off on an inclusive total R100,000.oo PM purchases?)

It's not as if SARS need to lay anyone off, just change focus to policing registered vendors and recruiting unregistered ones.

Accountants and bookkeepers will be just as busy as always with the companies.

[BusFact]

You don't think the cash economy option is the only thing that inhibits banks from raping us more than they do already?

Hmmm perhaps. But the "raping" tends to occur more when debt is involved. Simple transaction accounts aren't always so bad. Capitec is an example where some account costs are pretty low.

And on companies banking cash - you don't think with a 4.5% saving on the line they might not reconsider their processes?
Look at what lengths many people will go to already to save 1% or less for depositing cash, let alone legally skipping a 4.5% tax.
Changing the rules already? I thought the idea was to have only the banks burdened with collecting, administering and paying over this tax.

Hey, this is an idea, not a finely tuned thesis - its a work in progress . But I don't think I'm changing the rules ... yet. The cash economy should be phased out over time. The interim period is going to involve plenty of effort to discourage it. One of those methods could be to force additional admin on businesses wishing to trade in a lot of cash or alternatively require them to have an expensive licence. If t

For the vast majority of individuals and businesses, they won't conduct much trade in cash - if at all, and so will have none of this admin. Eventually, when cash is removed, no one will affected by this admin.

[gac]

I wonder if the 5 in 45 statistic quoted by SARS is fundamentally much different from say 20 years ago and doubt it. Therefore Dave's suggestion that the problem is not so much in the collection but perhaps the spending is a more realistic summation of the current problem. Not to say that the various solution suggestions don't have merit. Certainly however, one of the first and easiest actions to take SHOULD be to curb uneccessary, wasteful and negligent expenditure, something this government is EXTREMELY guilty of. For as long as money if being wasted as it is, no amount of increased collection will satisfy the requirement. If we need to increase the quantity of pure juice from the oranges we crush, we can improve the crushing process to a maximum point, procure better bigger oranges, run the risk of cheating by diluting the mix however the bottom line is to increase the number of oranges on the input side.

In driving through many previously disadvantaged areas I can't help but notice the increased standard of living, evidenced by the many homes that clearly exceed the municipal rates threshold (the value at which one is required to start paying rates). Many of these homes appear to exceed the size and value of similar houses in suburbs that are in the rates net. This is just one example of missed opportunity, deliberate or not, to widen the rates base and increase the collection base. If anybody can afford that quality and size of home, they can clearly afford to contribute to rates coffers and spread the load.

On increasing the tax base, real incentives need to be created in government spending that creates enabling environments for business that encourages and implores businesses to expand, invest, employ in sustainable industries. Offering "Band Aids" like grants and other social once-off events are helpful but not useful in addressing the fundamental structural issues that could secure the future. But politics is an evil so few of us recognises and we continue to be blindly led.

[gac]

Should read "...are helpful but NOT useful in addressing..."
Apologies

[desA]

HARD WORK

Two of the worst four letter swear words in the SA 'workers' vocabulary.

[Dave A]

A Psalm for Eskom

The Taxpayer is my source of income,
I lack nothing.
He feeds me at family fun days,
funds my budget and,
refreshes my balance sheet.
Even though Terence reports
unauthorised, irregular, fruitless and
wasteful expenditure,
I will fear no evil,
For the taxpayer is with me;
Your taxes and your savings,
comfort me.

This psalm came as a prelude in an email with even more sobering thoughts:

Mike Schussler estimates that if South Africa were to pay the average civil servant the same as the average formal private sector employee we would immediately save R100 billion a year - this is an equivalent of five Gauteng freeway projects a year - free from any tolls and with no extra taxes required.

If South Africa were to be so bold as to pay civil servant only 90% of their private sector equivalents - we could build a coal fired power station at a cost of R111 Billion every year. We will be able to do this without any increases in electricity prices.

It was recently reported that Eskom spent R36million on "family fun days" to increase the morale of its workforce. To put this into perspective: it is enough money to power more than a million poor households with a basic free electricity subsidy for a month.

This comes on the back of a 16% tariff hike and flies in the face of President Jacob Zuma's call on the parastatal to cushion the price blow for consumer.

So is the problem really how we collect tax, or how government spends it.

[BusFact]

So is the problem really how we collect tax, or how government spends it.

Undoubtedly the spending is the main issue.... by far. That doesn't mean that collections can't be simplified. Its just so ridiculously complicated at the moment.