Our tax burden

by Editor · July 18, 2012

In Matthew�s gospel we read that Jesus, like every citizen, paid his taxes, even in the face of unjust and corrupt governance. He did so grudgingly�Simon Peter had to catch a fish with a coin in its mouth to settle the tax bill�but he did nothing to evade payment (17:24-27).

"While the payment of due taxes...is a moral obligation, it also entitles taxpayers to demand accountability and transparency from their government."

With the new South African tax season in full swing, many of those citizens required to submit their tax return will do so with a similar displeasure. Many will take full advantage of openings provided in tax law to reduce their tax bills, an endeavour which is of itself ethical.

It is not morally licit, however, to cheat on tax returns, nor to evade them by declaring income from one country in a tax haven elsewhere.

The Catechism of the Catholic Church places tax evasion on a list of morally illicit conduct which includes corruption, fraud, price fixing, cheque and invoice forgery as well the payment of unjust wages. These, the Church teaches, offend against the Seventh Commandment, �You shall not steal� (2409).

The Catechism lists the payment of taxes as a moral obligation of citizenship (2240). As insurance fraud is theft from those whose premiums increase as a result of scams, so is tax evasion an act of theft from those who faithfully pay their taxes.

The tax evaders might make self-righteous claims about not wishing to fund corruption and wasteful expenditure, but they nonetheless benefit from the services that are funded by taxes, however imperfectly, such as security, education, infrastructural development and so on.

Moreover, our taxes fund social spending for the indigent. Withholding taxes therefore harms the poor. In the Gospel, Jesus has harsh words for those offend against the poor.

Tax avoidance by holding off-shore accounts in tax havens and other such manipulations are no less sinful. The rock band U2 has been rightly criticised by Irish citizens for paying their taxes elsewhere, especially since their tax avoidance stands in conflict with the amplified pronouncements of solidarity with the poor by the band�s singer, Bono.

Last month British prime minister David Cameron accused comedian Jimmy Carr of �morally repugnant� tax dodging through a fund-shifting scheme. He accurately pointed out: �It is not fair on hardworking people who pay their taxes to see these scams.�

The prime minister was embarrassed, however, when it was pointed out to him that some of his donors, political friends and colleagues�most of them significantly more wealthy than the comedian�have engaged in similar tax avoidance schemes as Mr Carr, as have also Mr Cameron�s own father and father-in-law.

Tax avoidance schemes reportedly cost the British treasury some �4,5 billion a year�enough to scrap a controversial new tax on pensioners.

The corresponding figure is probably lower in South Africa. Still, in May the South African Revenue Services� commissioner, Oupa Magashula, told parliament that illegal tax dodges by multinational corporations are robbing the treasury of billions of rands.

In particular, tax payers have a right to vigorously condemn the misappropriation of public funds and other forms of corruption, excessive salaries for public servants and extravagant purchases funded by tax money�such as, for example, a new presidential jet.

Indeed, all these instances amount to theft from the taxpayer�who in turn might face higher levies to compensate for the shortfall due to misspending�and from the poor. Taxpayers must therefore become increasingly engaged in those endeavours of civil society which campaign for greater fiscal vigilance.

Nobody likes to pay taxes, of course, but in Catholic teaching it is part of our collective responsibility for the common good.

In his 1961 encyclical Mater et Magistra, Pope John XXIII wrote that taxation �according to the ability to pay is fundamental to a just and equitable system�.

It is the duty of all those fortunate South Africans who are earning above a taxable threshold to meet their legal and ethical obligation in contributing to the common good.