Taxation: Constitutionality of the Tax Administration Act 28 of 2011

• Jurisdiction: South Africa
• Author: Fareed Moosa
• Published date: 27 May 2019
• Date: 27 May 2019
• Pages: 638-656

638

TAXATION: CONSTITUTIONALITY OF THE TAX

ADMINISTRATION ACT 28 OF 2011

Fareed Moosa

B.Proc (UWC) LLB (UWC) LLM (UCT) LLD (UWC)

Head of Department of Mercantile & Labour Law, University of the Western Cape

“A modern Midas might complain that everything he touches turns into tax.”1

1 Introduction

The Constitution of the Republic of South Af rica, 1996 (“Constitution”)

establishes an autonomous, democ ratic state whose society shall be governed

by democratic values and pri nciples. Section 9(1) in the Bill of Rights (“BOR”),

entrenched in Chapte r 2 of the Constitution recogn ises the fundame ntal right

of every person to equ ality before the law and equal protection and benet of

the law. The achievement of equality is also a founding const itutional value

(se ct ion 1(a)). The Constitution embodies the ideals bonding South A fricans

who must cohere and trans cend their divisions to recons truct society a nd,

contemporaneously, change the condition of people’s l ives. T his is reected

in the solemn declaration of its Prea mble that records the commit ment to

“[i]mprove the quality of life of all citizens and fre e the potential of each

person”. This is an import ant facet of transformat ion and a primary m ission

of the Constitution whose provisions are t ransformative in nature and effect.2

The Constitution is a prod uct of South Africa’s (“SA”) painful, chequer ed

history under ap artheid, a repressive political syst em that created Wh ite

privilege and advantage at the exp ense of Black3 people. A key constit utional

aim is the empowerment of Blacks disa dvantaged by unfair discri mination.4 A

remnant of apart heid is the class chasms that exist between SA’s economically

marginalised Black com munities and the rest of society. This creates a bar rier

that hinders social c ohesion, national unity, nationhood and t he realisation of

a uniform national ident ity. Achieving substantive, as distinct f rom formal,

equalit y5 is at the epicentre of SA’s constitutional project. It preo ccupies

constitutional thinking.6

Apartheid’s system of “racial oligarchy”7 left a deeply polar ised society

in its wake. Inequalit y in its many manifest ations, including access to

land, quality basic a nd tertiar y education, health care, water a nd sanitation

1 D Kruger, M Ste in, P Dachs & AH Davey Bro omberg on Tax Strateg y 5 ed (2012) 1.

2 Soobramoney v Minister of Health (KwaZulu-Natal) 1998 1 SA 765 (CC) para 8.

3 In this ar ticle, unless t he context indic ates otherw ise, “Black” be ars the meani ng as define d in the

Employment Equ ity Act 55 of 1998, namely, “Africans, Colou reds and India ns”.

4 South Afric an Police Service v S olidarity on beh alf of Barnard 2014 6 SA 123 (CC) paras 29-33.

5 P De Vos “Grootboom: The right of access to ho using and substantive eq uality as contextu al fairness”

(2001) 17 SAJHR 258 262 adopts the notion of “real” equ ality.

6 Minister of Fina nce v Van Heerden 2004 6 SA 121 (CC) paras 2 2-23.

7 Holomisa v Argu s Newspapers Ltd 1996 1 Al l SA 478 (W) 492.

(2017) 28 Stell LR 638

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services, is an apa rtheid legacy that continue s to scar society and erode s

the dign ity of those af icted thereby. The Con stitution’s promise of a better

life for all refers, inter alia, to the fullment of the socio-economic rights

embodied in the BOR, land red istribution and rest itution, the maintena nce

of law and order, the availability of jobs, and the building of in frastr ucture

required for a united , prosperous and secu re democracy. By and large,

socio-economic human rights remain un fullled constitutional promises.8

Consequently, large p ortions of SA’s Black citize nry still l ive in undignied

conditions. They continue to a spire to a better life with e quality and human

dignity. These are basic huma n rights that are par t of the core moral code

common to all so-ca lled “civilised” societies. Whi lst there is no simple or

immutable standa rd of what constitutes a democratic society,9 true d emocracy

will remain elusive if substa ntive inequality conti nues to pervade society i n

SA.10 After more tha n two decades of freedom and demo cracy, SA remains

plagued with rampant pover ty, homelessness, unemployment, inequalit y and

other social ills hark ing back to the dark days u nder apartheid.11 Th is has

increased disconte nt among SA’s poor, mainly Black, communities and ha s

led to them embarking on mor e frequent, often violent, str eet protests.12 The

Fees Must Fall campaign by university stude nts on campuses across SA is

another example typif ying the national mood and continue d struggle for social

justice through t he realisation of socio-economic r ights. A major challenge

for successive democratically elected govern ments has been determin ing how

to successfully implement SA’s rst-class Constitution to its T hird-World

conditions dogged by the social ills refer red to above. The success of any

effort in this regard h inges on access to adequate nance f rom taxation.

2 Probl em statement and researc h question

The Constitution honour s “those who suffered for justice a nd freedom in

our land”. This is the human cost of fr eedom and democracy. Taxation is its

attendant nan cial cost. The Constitut ion imposes a positive duty on the state

to “respect, protect, promote and full the rights in the Bill of Rights” (section

7(2)). In certain ins tances, the Con stitution species that satisfaction of this

8 Human right s are inviolable, ina lienable, univers al claims that are ne cessary to gr ant every human b eing

a decent life. See P C ullet “Defin ition of an environ mental right a s part of a human r ights context” (1995)

13 Netherlands Q uarterly of Hum an Rights 25 26; L Wenar “The Na ture of Human R ights” in A Follesdal

& T Pogge (eds) Real World Justice (2005) 285.

9 J Murphy “Th e constitutiona l review of taxation” (1995) Acta Juridica 89 104.

10 See S Liebenber g & B Goldblatt “The i nterrelat ionship betwee n equality a nd socio-eco nomic rights

under South A frica’s transformat ive Constitution” (20 07) 23 SAJHR 335.

11 Minister of Poli ce v Premier, Western Cape 2 013 12 BCLR 1365 (CC) para 4; Loureiro v Imvula Qu ality

Protection ( Pty) Ltd 2014 3 SA 394 (CC) para 2.

12 Centre for Con stitutional R ights “Huma n Rights Repor t Card 2016” (2016) Centre for Conti tutional

Rights 2-3 (accessed 28-12-2016).

See also Ngaka Mo diri Molema District Mu nicipality v Chairper son, North West Provincial Ex ecutive

Committee 2015 1 BCLR 72 (CC) para 16.

CONSTITUTIONALITY OF THE TAX ADMINISTRATION ACT 639

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