An understanding of the ‘rule of law’ will enhance your understanding of SA’s tax rules, although you could apply this knowledge elsewhere. Section 1 (C) of South Africa’s Constitution declares that SA is one, sovereign, democratic state founded on values of which supremacy of the Constitution and the rule of law are one.
Although the concept has a number of different interpretations, according to Wade and Forsyth in Administrative Law (Oxford University Press) the primary meaning of the term is that everything must be done according to law. In turn this means that every government act which would otherwise be wrong or which infringes one’s liberty must be justifiable – authorised under law.
Government’s actions must also be conducted in a non-arbitrary fashion – that is, in terms of a framework of recognised rules and principles which restrict discretionary power. Preventing the abuse of discretionary power is an essential part of the Rule of law. As a judge in an English case put it: the judiciary accepts “a responsibility for the maintenance of the rule of law that embraces a willingness to oversee executive action and to refuse to countenance behaviour that threatens either basic human rights or the rule of law.”
Another judge notes: “Parliament must be presumed not to legislate contrary to the rule of law. And the rule of law enforces minimum standards of fairness, both substantive and procedural”. The idea of the rule of law, or that the power of the state may be limited, has been a central theme of Western philosophy for centuries.
In the 1700s Jean-Jacques Rousseau wrote: “It is to law alone that men owe justice and liberty. It is this salutary organ of the will of all which establishes in civil right the natural equality between men. The first of all laws is to respect the laws.”
The much-misunderstood AV Dicey popularised the term ‘rule of law’ more than a hundred years ago in England.
According to Dicey, the rule of law is supported by three principles:
- Absolute supremacy of law – the government and other powers are subservient to the rule of law, and the arbitrary powers of a government cannot outweigh the rule of law.
- All are equal and subject to the same laws and to the jurisdiction of the courts of the land.
- Constitutional rights such as personal liberty are the product of the common law. That is, the common law is the guarantor of the freedoms and liberty of the individual.
The rule of law is central to constitutionalism and the constitutional state. Without it, a democracy could easily devolve into the rule of the majority (might is right). It’s thus very important to bear in mind the fact that SA has enshrined in the Constitution the founding principle that the rule of law is supreme – as it is in any civilised country. The rule of law underpins SA’s tax laws – and those of any democracy. Without the rule of law, a government might simply grab assets, including taxes, and even over-tax its citizens.
Peter O’Halloran is head of tax at BDO, Gaborone. Contact him on 00267 390 2779 or at [email protected]. Please state ‘Tax’ in the subject line of your email.