If Albert Einstein found tax difficult to understand, what hope do first-year students and ordinary taxpayers have of understanding the complex tax environment in South Africa? Professor Hanneke du Preez, Head of the Department of Taxation at the University of Pretoria (UP), is giving tax complexity a run for its money.

In her professorial inaugural address, Prof du Preez kept her guests engaged and entertained by bringing some much-needed simplicity to various pressing – and sometimes controversial – tax issues.

During her lecture, titled ‘Social transformation through education in the taxation landscape’, she touched on the use of virtual reality (VR) to bring real-world tax challenges to life for students in packed lecture halls, and looked at practical ways to empower taxpayers who cannot afford professional tax services. She also invited the audience to consider how a universal basic income grant might help fund education in the future.

Her lecture recounted key moments in the history of tax, which dates back to the Middle East in 4 000 BC, and quoted historical figures such as Confucius, who advised a ruler in ancient China around 500 BC that a tax rate of 10% – no more and no less – was fair and just. 

An illuminating fact from English tax history is that, in their efforts to distinguish between the wealthy and the poor, tax authorities measured the height of people’s hats and counted the number of dogs and windows in households.

“They believed that the more windows you had, the richer you were,” Prof du Preez said.

Equity versus equality

The common thread running through all the proposed taxation models was equity – a notion close to Prof du Preez’s heart.

She argued that equity and equality are often seen as synonyms – while in reality they are not. “With equal treatment, everyone gets exactly the same, but the end product may be unequal. With equity, the distribution is not equal but according to everyone’s specific needs. The outcome is equality,” she explained.

“In South Africa, we have the biggest wealth inequality score, and it has increased by 17% in the last 15 years. We need to find solutions to solve the problem. One possible solution would be through education.”

However, the problem with education is always funding, said Prof du Preez, who has researched possible funding instruments, including universal basic income, through which a grant is given to every person in the country.

“We asked people what they would do with the grant, and one of the answers was they would use it to re-educate themselves. Re-education is something very much needed for our future, if you think about automation and the possibilities of unemployment with artificial intelligence,” she said, adding: “Just think about it for a moment regarding funding for future education.”

Innovation is still possible in large classes

Moving on to innovation in education, Prof du Preez said a problem at UP is the huge numbers of students in some classes. “When you have 800 students, there is no way you can go on a field trip – but you can bring the field trip to them through VR.”

Research on the use of VR among UP taxation students has shown it works. “Most of the students had a very positive experience. They understood better and the knowledge was embedded in their thinking,” Prof du Preez said, adding that her research team is expanding their VR work to the University of Venda and the University of Zululand.

Turning to taxpayers who cannot afford to use a tax practitioner, she outlined the South African Tax Clinics project, a collaboration between UP, Unisa and the Tshwane University of Technology (TUT). “The tax clinics expose our students to skills they will use in the real world one day, and empower unrepresented taxpayers to become taxpayers with their own knowledge, who know what they are doing.”

This unique inaugural address offered much food for thought on a field often considered dry and difficult for laypeople to follow.