Tax revolts : analysing the South African governments' response to the Covid-19 pandemic and taxpayer compliance

Abstract

Background: South Africa faces challenges with regard to unemployment, inequality and poverty. These triple challenges have been exacerbated due to the Coronavirus 19 disease (Covid-19) lockdown restrictions and its impact on the economy. Faced with the challenge of growing the economy while citizens suffer under the burden of excessive taxes, the 2021/22 Budget Speech sought to create growth and combat unemployment and poverty, while taking care not to place too much of a burden on its citizens.

Main purpose of the study: This study provides an overview of the factors which lead to tax revolts and looks at the public perception of the 2021/22 Budget Speech to determine if tax policies have been structured fairly. A tax revolt would have a devasting effect on the economy given the current slow growth in Gross Domestic Product (GDP) as well as high levels of unemployment, thus it is important to analyse trends and determine if South Africa is at risk of a tax revolt.

Method: Data will be analysed by reviewing the existing literature on the subject as well as comparing this literature to trends found over microblogging platforms such as Twitter as well as infoveillance tools such as Google Trends. The data will be systematically analysed and sourced through pre-selected key-words to scope out the most relevant information.

Findings: In this study, Google Trends and Twitter were the selected platforms through which public opinion insight was obtained. The findings of the research suggested that though the Budget Speech appeared to implement fair tax policies, public perception changed based on announcements of increases in levies and government inefficiencies. Such announcements lead to low levels of tax morale and ultimately an interest in the implementation of a tax revolt.

Conclusion: The public perception of state policy is important for the growth of the economy. Corruption and poor levels of service delivery are key elements towards how taxpayers will respond to changes in tax policy. While the Budget Speech may have allayed the scepticism of the public, the state should do well to ensure that they meet their obligations and not further stint growth through irrational decision making and not doing enough to combat corruption.