The rule of law, and our tax money

The rule of law implies that every citizen is subject to the law, including the lawmakers themselves.

Peter o’Halloran - Tax advice

The rule of law holds that laws, as opposed to the whims of individual government officials, should govern a nation.

The laws must be clear, publicised, stable and just, and applied evenly. The government is just as accountable under the law as any other entity.

In South Africa, at this point, according to former finance minister, Pravin Gordhan, some R100 billion has been lost to ‘state capture’.

The evidence that state money, or, in other words, the taxes paid by ordinary South Africans, is being ‘looted’ from the state is overwhelming. The rule of law is being flouted and there is no accountability.

A case in point is ‘S and M Transportation’, which supplied blue-light-fitted cars for the transport of the Gupta wedding guests to Sun City from the Waterkloof Air Force base in April 2013.

The company, which is unregistered, billed the Gupta family in excess of R500 000.

Government officials have admitted that the use of blue-light vehicles was illegal, but as far as I know, they have said nothing about the fact that unregistered companies do not have to pay income tax. Would SARS have let an ordinary citizen get away with such a ploy? Is there not a double standard being applied here (and elsewhere)?

In numerous case authorities, the rule is that the power of an organ of state may only be used for the purpose for which it was granted.

“Powers given to a public body for one purpose cannot be used for ulterior purposes [that] were not contemplated at the time the powers were conferred,” says the ruling in Orangezigt Estates Ltd v Cape Town Council, (1906) 23 SC 297 at 308, for example.

With this in mind, it could be argued that SARS might be using the revenue collection statutes for purposes for which they were not designed.

The authors of ‘Betrayal of the Promise: How South Africa was Stolen’, a report compiled by the universities of Cape Town, Stellenbosch, Johannesburg and the Witwatersrand, state: “[There is a] political project at work to repurpose state institutions to suit a constellation of rent-seeking networks that have been constructed, and now span the symbiotic relationship between the Constitutional and shadow state. This is akin to a silent coup.”

If this can be proven, then the collection of taxes under the current circumstances is ultra vires – outside of the law, and outside of the legal framework for which it was intended, and therefore illegal.