10 July 2013
In 1994 millions of South Africans voted for the first time, their vote ensured that Nelson Mandela became the first democratically elected President of the country. That same year millions of taxpayers also contributed their fair share to the coffers of our new government.
Since 1994, government has continually strived to deliver services to ensure a better life for all. The tax paid by individuals has contributed to make this vision a reality for more people with each passing year.
Life for the majority in 1994 was a far cry from what we know today; basic services such as electricity, sanitation and water were non-existent for many. People were forced to live in degrading conditions and the dream of owning a home seemed impossible to all but the very fortunate.
The newly elected government was confronted with a failing and bankrupt state. At his inaugural State of the Nation Address in 1994, former President Mandela announced that an ambitious Reconstruction and Development Programme (RDP) would be put in place to roll back the ills of apartheid.
The RDP aimed to meet basic needs; develop our human resources; build the economy and democratise the state and society.
It was an ambitious plan to address the many historic social and economic problems which faced our new democracy, in particular the lack of housing and jobs; inadequate education and healthcare, and a failing economy.
Human Rights Day, 21 March 1998 former President Mandela highlighted the significance of the RDP in addressing the legacy of the past.
“Our experience, and the experience of all humanity, also tells us that our rights will remain without their real substance unless there are real improvement in the lives of our people. That lesson is also written in our constitution and it is at the heart of our nation's programme of reconstruction and development.”
This ambitious plan needed to be financed by a consistent revenue stream which would mean the transformation of the tax system. The government under Former President Mandela oversaw the creation of the South African Revenue Service (SARS) and a number of policy initiatives that boosted the legitimacy of the tax system and the collection processes.
The next two administrations have continued supporting the continuing transformation of SARS to ensure efficient and effective tax collection.
Almost twenty years later we still reap the socio-economic benefits from the solid foundations former President Mandela’s administration laid to deal with post-apartheid challenges.
Society has been totally transformed in every sphere since 1994. The Census 2011 results bear testimony to this:
Households with access to piped water increased from 80.3 per cent in 1996 to 91.2 per cent in 2011.
The number of households that use electricity for lighting increased from 58.2 per cent in 1996 to 84.7 per cent in 2011; and households that use electricity for cooking increased from 47.5 per cent to 73.9 per cent over the same period.
The proportion of households living in formal dwellings increased from 65.1 per cent in 1996 to 77.6 per cent in 2011.
School enrolment for six-year-olds increased from 49.1 per cent in 1996 to 92.7 per cent in 2011, while the enrolment of seven-year-olds up from 73.1 per cent in 1996 to 96.1 per cent in 2011.
In 1994 there was a massive housing backlog and the new government prioritised the building of houses. The 2012 Midterm Review Report reflects the massive strides made; between 1994 and 2011 approximately 2.8 million subsidised housing opportunities were created.
Since 1994, the taxes that you and I pay continue to change lives. The payment of income tax is a contract between citizens and the state, where citizens pay their fair share and the state in turn provides and maintains infrastructure, implements social services and creates structures necessary for the proper functioning of the country.
A quick glance at last year’s returns from individual taxpayers reveals that South Africans have taken to heart the notion of actively contributing to our democracy. More than 12 million individual taxpayers together contributed a total of R276.8 billion through personal income tax out of total revenue of R814.1 billion.
The Minister of Finance, Pravin Gordhan has announced that SARS has set its sights on a revenue collection target of R898 billion for the 2013 tax season.
“The more tax we can collect, the less we have to borrow, and the more we will get to build houses and invest in infrastructure,” he said.
The money that you and I contribute in personal income tax is changing lives and contributes directly to building a more prosperous country. Earlier this year during his budget speech, Minister Gordhan announced that over the next three years, R827 billion will be spent by the fiscus and state-owned companies for infrastructure development.
“The fiscus has allocated just under R430 billion for schools, hospitals, clinics, dams, water and electricity distribution networks, electrification of over a million new homes, sanitation schemes, building more courtrooms and prisons, and improved bus, commuter rail and road links,” he said.
With Tax Season now in full swing most people are likely to log onto their computers or smartphones over the coming months to complete their tax returns, others may choose to visit a SARS branch, or choose the traditional option of submitting their returns manually. Whichever way you choose to file this year, know that you are making a difference and contributing to our country.
Government is encouraged that by the morning of 4 July, just three days after Tax Season began; over 264,448 South Africans had already filed their tax returns. In turn government is committed to spending this money wisely, and to the benefit of all.
At the launch of Tax Season Minister Gordhan reiterated that government has to spend public funds prudently.
“We must get better outcomes, we must have higher productivity, we must have better delivery and above all: South African citizens must be able to visibly and palpably feel the change in their lives as a result of this expenditure.”
The legacy that Madiba began in 1994 lives on in our prudent economic policies, our infrastructure and social spending, and our commitment to building a better life for all.
Phumla Williams is Acting CEO of the Government Communications and Information System (GCIS)