South Africa: The Govt's Fuel-Related Levies and Taxes Are Unsustainable

opinion

Problems loom when the government applies short-term thinking on state revenue streams, which is evident from incessant increases applied to various taxes, especially those that appear to ignore future challenges that threaten its income.

There is a position that says more taxes aren't necessarily a bad thing, as these are ploughed back into the infrastructure spending of a developmental state, which improves the economy. That's true if it happens that way. Sadly, ours is often wasted through gross inefficiencies in leaky procurement processes that pay three times the price for infrastructure that we don't often need, while a whole lot is lost to corruption.

The result is overspending and less delivery which stimulates the angry taxman to seek more revenue, often through a short-term mindset, by increasing taxes or borrowing more money, both of which can lead the country into a cul-de-sac of reduced prosperity and even that of a failed state. Of course, this depends on how exactly the money is spent and the value for taxes paid, as experienced by citizens.

Too often, the tax increase envelope is pushed too far and the purpose of specific taxes is lost or challenged, placing the state in a precarious position...

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