Bigger+fish+to+fry+than+messy+Zuma+finances,+Lester,+Sunday+Times



=Bigger fish to fry than Zuma’s messy personal finances=


 * Matthew Lester, Sunday Times, Business Times, Tax Talk****, 13 January 2008**

I was quite fascinated by the breakdown of amounts paid to Jacob Zuma by the Shaiks on the front page of last week’s Sunday Times.

“Well,” I thought, “at least we have a President-in-waiting whose personal finances look like many of his electorate. R4-million over 10 years is about what many yuppies have borrowed through the bond originators. But it must have been a cheapskate tax consultant who only charged R3 990.”

I agree with David Bullard that we didn’t exactly cover the Rainbow Nation in glory during 2007. But the question is: “What are we going to do about it during 2008?”

In 2003-04 I interviewed many prospective offshore amnesty applicants. If they had been pursued by SARS and/or the Reserve Bank, most would have faced the prospect of doing time in jail. When I asked them how they got into such a mess, the response was “my advisers told me to do it. And I trusted them.”

Now turn to JZ. He arrives in the new RSA and gets the esteemed position of Deputy President. And most of us comfortably took it for granted that he would succeed Thabo Mbeki.

Now, if today it costs R5 000 to kit out a kid with the basics to attend a private school, I can quite see how it can cost R18 000 to kit out the deputy president.

We don’t exactly have a parliamentary uniform, do we?

By the time JZ was sidelined and Phumzile Mlambo-Ngcuka took over, the basic salary of a deputy President had reached the level of ±R860 000 per annum (including car allowance but excluding the perks.) Let’s assume JZ got the same. Let’s be frank, one simply cannot play the part of a deputy president, let alone president-in-waiting, with an extended family, all on a pre-tax package of R860 000.

Perhaps that’s why Mlambo-Ngcuka’s salary was increased to more than R1.7-million per annum by 2007, nearly as much as Mbeki’s at R1.8-million.

Even a deputy minister now gets about R1.2-million. And a backbencher MP around R650 000.

Of course, one can do much better by abandoning careers in Parliament or the civil service altogether.

Try Tito Mboweni at R2.8-million. Or Maria Ramos at R6.8-million. Not too shabby, Nige! And, in my humble opinion, they are worth it.

Now the correct way for JZ to have fixed his finances would have been to wait for the report of the Independent Commission for the Remuneration of Public Office Bearers. Even after tax, that would have been enough to cover the shortfall at the expense of taxpayers instead of the Shaiks.

But let’s go back to the lessons learned from the Offshore Tax Amnesty.

When it was announced in February 2003 there were Doubting Toms all over.

But by February 2004 it was all more or less resolved and today 43 000 South Africans pay additional taxes of about R2-billion a year from the legitimised funds.

I cannot imagine what would have happened had we had not had the amnesty.

Nobody is going to win from the endless pursuit of JZ — unless one is fortunate enough to be part of his defence team, that is.

Let’s credit pocket and debit experience and take a shower on it.

The world is bracing itself for a difficult 2008 and South Africa has bigger matters at stake.


 * Lester is professor of taxation studies at Rhodes University, Grahamstown


 * From: http://www.thetimes.co.za/PrintEdition/BusinessTimes/Article.aspx?id=678909**

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