Taxation: Constitutionality of the Tax Administration Act 28 of 2011

• Jurisdiction: South Africa
• Citation: (2017) 28 Stell LR 638
• 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 Africa, 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 Chapter 2 of the Constitution recognises 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 constitutional value

(section 1(a)). The Constitution embodies the ideals bonding South Africans

who must cohere and transcend their divisions to reconstruct society and,

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

in the solemn declaration of its Preamble that records the commitment to

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

person”. This is an important facet of transformation and a primary mission

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

The Constitution is a product of South Africa’s (“SA”) painful, chequered

history under apartheid, a repressive political system that created White

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 cohesion, national unity, nationhood and t he realisation of

a uniform national identity. Achieving substantive, as distinct from formal,

equality5 is at the epicentre of SA’s constitutional project. It preoccupies

constitutional thinking.6

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

in its wake. Inequality in its many manifestations, including access to

land, quality basic and tertiary education, health care, water and 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 article, unless the context indicates otherwise, “Black” bears the meaning as defined 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 Heerden2004 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 apartheid legacy that continues to scar society and erodes

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 redistribution and restitution, the maintenance

of law and order, the availability of jobs, and the building of infrastructure

required for a united, prosperous and secure 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 aspire to a better life with equality and human

dignity. These are basic human rights that are part of the core moral code

common to all so-called “civilised” societies. Whilst there is no simple or

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

will remain elusive if substantive inequality continues to pervade society in

SA.10 After more than two decades of freedom and democracy, SA remains

plagued with rampant poverty, homelessness, unemployment, inequality and

other social ills harking back to the dark days under apartheid.11 This has

increased discontent among SA’s poor, mainly Black, communities and has

led to them embarking on more frequent, often violent, street protests.12 The

Fees Must Fall campaign by university students on campuses across SA is

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

justice through the realisation of socio-economic rights. 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 referred to above. The success of any

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

2 Problem statement and research question

The Constitution honours “those who suffered for justice and freedom in

our land”. This is the human cost of freedom 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.

10See S Liebenberg & B Goldblatt “The interrelationship between equality and socio-economic rights

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

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

Protection ( Pty) Ltd2014 3 SA 394 (CC) para 2.

12Centre for Constitutional Rights “Human Rights Report Card 2016” (2016) Centre for Contitutional

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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