Tax willingness plummeting due to lockdown and corruption – Sakeliga poll 

10 August 2020

A new Sakeliga poll shows that lockdown and corruption is pushing businesses’ willingness to pay tax off a cliff.

95% of respondents in a Sakeliga poll this week said that lockdown decreased their willingness to pay tax. Nine out of 10 indicated an inclination to delay tax payments for as long as legally possible. Six out of 10 would even consider illegally withholding tax if encouraged to do so and if it could end lockdown quicker.

Piet le Roux, Sakeliga CEO says that a new normal in tax willingness is rapidly taking hold. “The new normal for tax willingness is going to be much lower than before. We recommend that government and analysts compensate for this trend in their estimations of future fiscal deficits. Businesses are becoming unusually motivated to decrease their tax payments.” 

Le Roux says that, from participants’ comments and the state of the country, evidently lockdown, corruption, mismanagement, and generally harmful government policies have created a perfect storm. 

“A senior executive at one of South Africa’s iconic companies recently put it to me that he considers paying tax in South Africa a possible violation of the American Foreign Corrupt Practices Act, since the money largely funds harm, mismanagement and corruption. While this interpretation is probably, legally speaking, incorrect, it is morally striking. This moral dilemma is weighing with increasing burden on businesspeople in South Africa: they consider it their duty to serve and fund the common good, yet they increasingly view tax as detrimental to society because of how it funds mismanagement, corruption, and harmful policies,” says Le Roux. 

Further highlights from the poll include: 

84% said government handled the Covid-19 outbreak badly, 14% were ambivalent, and 2% said government handled it well. 

61% of businesses suffered big financial losses, 29% significant, with only 10% seeing their income unaffected or increased. 

94% scored the fairness of government’s Covid-19 relief measures as either “Very bad” (78%) or “Bad” (16%). 

For the poll report, click here. 

883 people participated in the self-selecting poll, conducted among more than 40 000 individuals in Sakeliga’s membership and network. Most participants responded via an email link, and around 10% contributed through links accessed on social media. 

The poll is not a nationally representative poll. Sakeliga’s analysts do consider the poll to be a generally accurate indication of a new normal in taxpayer sentiment, even after compensating for self-selection among the non-random poll contributors. The intention with the poll was to gauge businesspeople’s willingness to pay tax in light of lockdown.  

Issued by Piet le Roux, CEO: Sakeliga, 10 August 2020