UP EXPERT OPINION: For the sake of the poor, it must be no to a tax revolt but yes to tax bargaining

Posted on September 19, 2023

The national news and social media have been abuzz the past week or so with the news of Asad Gaffar and his small band of merry men from Westville flexing civic muscle against the long-standing overreaches and failings of the unrepentant eThekwini municipality.

A tax revolt, or a tax boycott, is what it says on the label. It is simply not accurate in this instance though, serving only to shroud a courageous civic endeavour, born from exasperation, in a cloud of subversiveness. It is in fact an effort to activate tax bargaining, a respected and well-researched mechanism of accountability, and also perhaps the most attractive attribute of a fiscal state.

A fiscal state (such as SA) is a tax-dominant state in the sense that most of government revenue is obtained from taxes, as opposed to a rentier state for instance, where state revenue comes from resource rents. A fiscal state implies reciprocity in state-society relations; citizens need services from government, but the government needs citizens to pay taxes.

Therein lies the governance dividend associated with fiscal states. At least in theory, fiscal states appreciate the reciprocal dependence and tend to govern responsively and accountably; they realise they need to “earn” their revenue. This reciprocal social contract presupposes a civic space where states and citizens engage and negotiate, among other things, how hard-earned taxes will be spent by the state (or municipality).

In this way, tax morale and trust in the government are cultivated, both of which serve citizens’ voluntary compliance with tax liabilities. It is well understood — and incorporated implicitly — in this benign social contract that citizens may leverage the reciprocity of their taxes to demand accountability should government veer off course.

Once elected, a fiscal state could spurn citizens’ mandate about how they would like to see their tax money allocated, proceed to choke off civic engagement and resort to coercive enforcement of rates and taxes. An asymmetrical, exploitive social contract then emerges. On the one side, there is unresponsive and unaccountable governance without consequence even in the face of huge overreach, and on the other the inevitably aggrieved and powerless taxpayers who are coerced into funding a dysfunctional (or worse) state.

There is no governance dividend here, and also not much tolerance for taxpayers objecting to the oppressive state of affairs. Efforts to engage with state actors are unwelcome when accountability is not on the agenda, and any attempt to leverage the reciprocity of taxes in pursuit of accountability is criminalised and probably also socially shunned.

Trying to engage with unresponsive authorities through civic action to try to renegotiate the unfavourable terms of the social contract, while being perfectly willing to comply with tax obligations, is not a tax revolt. It is an effort to introduce tax bargaining as an accountability mechanism when there are no other avenues. That it is necessary to go to these extremes in a constitutional democracy, is an indictment on a state and raises grave concerns about its mode of governance, irrespective of the democratic spin it employs.


To be clear, unlike tax bargaining, a tax revolt entails a pushback against taxes and is rooted in an unwillingness, for whatever reason, to comply with a given tax obligation. E-tolls would be an example of a tax revolt; the citizenry simply refused to comply. It is clearly not the same as the events unfolding among compliant, concerned citizens in Westville.

There is a further important issue to be considered when resorting to tax bargaining. Given SA’s history, before and after 1994, more than half of our population qualifies as poor in terms of World Bank poverty measures. But we know this; the suffering is painfully visible. The poor and vulnerable in our society rely on the social wage funded through the tax and transfer system to survive.

When taxpayers — as a last resort — start leveraging their tax obligations to force a recalcitrant government to negotiate about greater accountability, the gravest concern is for the effect it may have on this vulnerable and marginalised section of our population. Clearly, taxpayers do not have more rights than these citizens, and should not have more power to influence the social agenda either.

I would like to believe the average taxpayer fully grasps the importance of a progressive tax and transfer system, and does not view taxes as user charges that buy public services for themselves. Taxpayer discontent arises not only because the lives of taxpayers themselves are heavily disrupted by failed service delivery. Taxpayers are angry because their substantial tax contributions seem to make no difference to the appalling conditions of the poor either.

The accountability taxpayers would demand extends to the many ways in which the poor have been betrayed, from the low-quality public education and health services on which they rely to load-shedding, crumbling public infrastructure, failing law and order and exorbitant crime, to the ultimate low point of theft of food parcels and personal protective equipment during the Covid-19 pandemic, which was meant to bring relief to the poor.

It is crystal clear that our entire social trajectory would have had a much rosier outlook if the poor had been supported in the ways taxpayers had hoped and expected. So the poor and vulnerable have perhaps the most to gain if taxpayers manage to renegotiate a social contract and if public funds — all of it — are spent well and accounted for.

Municipalities will do well to recognise the end of their reign of impunity and start responding to the appeals of reasonable citizens who are weary of exploitation. This would be the way to stave off the destructive tax revolts that are looming; suppressing legitimate objection again, is not. Nor is turning a blind eye to the groundswell of support for Gaffar and his supporters.   

Hence, for the sake of the poor it must be a resounding no to tax revolts but a yes to leveraging our taxes to force state-society engagement in the pursuit of responsive and accountable governance.

This article first appeared on BusinessLive on 12 September. Dr Sansia Blackmore is a senior lecturer in the African Tax Institute in the Faculty of Economic and Management Sciences at the University of Pretoria.

- Author Sansia Blackmore

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