South Africa’s tax revolt has already begun

In South Africa, the phrase tax revolt tends to conjure up images of thousands or even millions of taxpayers announcing that they will simply stop paying the South African Revenue Service (SARS). This is usually imagined as setting up a trust fund and getting people to pay their tax money into that account, for it to be used to fulfill the services that the government was supposed to be delivering.

Yet, during our recent conversation at KragDag, economist Dawie Roodt argued that the idea of a spectacular tax revolt misses something that is already happening. The ‘revolt’ in South Africa is both more quiet and more legal than people tend to think. Taxpayers are moving capital abroad, emigrating, arranging their affairs more aggressively, looking for every lawful means to reduce their tax exposure and, in some cases, deciding that additional work or investment is simply not worth the trouble.

In that sense, South Africa’s tax revolt has already begun.

This should concern us, because the very notion of taxation rests on a fundamental question about the relationship between political authority and society: what is the state for, what can the state legitimately demand from citizens, and what happens when it increasingly fails to fulfil the responsibilities by which those demands are justified?

What are taxes supposed to pay for?

One of the most influential answers in the more recent Western political tradition comes from John Locke. In his account of political society, persons submit themselves to political authority because life outside an ordered society leaves their ‘lives, liberties and estates’ insecure. Government exists to protect these things. Taxes are necessary because government cannot perform this task without resources, but its authority to tax is (or should be) limited by the purpose for which government exists.

This is not a complete theory of government, but it provides a useful starting point.

Consider life. Citizens pay taxes to maintain the police, the justice system and other institutions responsible for public safety. Yet, in South Africa, relying on the tax-funded state for safety is considered reckless, as the state does not have the capacity to keep people safe. Instead, taxpayers who can afford it also pay private security companies, install alarms and electric fences, join neighbourhood watches and finance community safety initiatives. This is what we call ‘double tax’ – paying tax for the state to fulfill a societal need, and then using what remains of your income to pay again, to have it done through the private sector.

Recent crime figures have improved from the peaks of the past few years, which should be welcomed, but the police still recorded 5 181 murders between January and March 2026 alone. The Institute for Security Studies correctly describes this as an extremely high level by international standards.

Then there is liberty. The conception of the state embedded in South Africa’s political order extends far beyond the classical protective functions associated with life, liberty and property. The Constitution places obligations on the state relating to housing, healthcare, food, water, social security and education, among other things. Whatever one’s view of the desirability of these objectives, the consequence is an expansive conception of political responsibility. Once virtually every social problem is treated as something that central government must solve, the state inevitably requires more money, more administrators, more regulations and more power. When people become dependent on the state to improve their lives in the most fundamental ways, and the state fails to do these things, our freedoms are eroded.

This is where an important distinction is often lost. The state and society are not the same thing.

Society is a complex network of overlapping associations—beginning with the family, expanding into local communities, and flourishing through schools, churches, businesses, and voluntary cultural institutions. In Aristotelian terms, society is a ‘community of communities.’ It builds from the bottom up, where smaller, natural forms of human cooperation layer together to create a self-sufficient social order. The modern territorial state is not the whole of this order. Instead, it is a single artificial construct, created by people in the aftermath of the Enlightenment and the Treaty of Westphalia, with the intention of safeguarding the diverse associations that exist within it. As a result, treating every problem in society as a responsibility of the state gradually pushes these other institutions to the margins and transfers both responsibility and resources towards the political centre.

Finally, consider property. Several attempts have been made to erode the property rights clause in the South African Constitution. Additionally, South Africa now has an Expropriation Act under which property may, in specified circumstances, be expropriated at ‘nil’ compensation (which is alleged to be something other than ‘without’ compensation). The law is currently being challenged in the Western Cape High Court. But the threat of confiscation is only one aspect of the deterioration of property rights in South Africa. In a much more real sense, the Prevention of Illegal Eviction from and Unlawful Occupation of Land (PIE) Act protects illegal land invaders in South Africa against the property rights of legal landowners. We do not know how many illegal land invasions happen in South Africa per year, but considering that there are more than a thousand in Cape Town alone, it's safe to assume that the national number is upward of ten thousand.

It is clear then that the South African government does not protect life, liberty or property.

The contradiction nevertheless deserves attention. Citizens are required to surrender a substantial portion of what they earn to a state that is simultaneously expanding its power over what remains. Additionally, minorities in South Africa, who pay disproportionate taxes, find themselves in a position where they have to fund Government programmes that aim to persecute them. This disproportionality is not insignificant, as will be pointed out later.

The problem with the social contract

This brings us to the question of the ‘social contract’. The social contract is argued to be an unwritten agreement where people give up some absolute freedom to follow rules in exchange for safety, order, and protection from a government. This concept originated in ancient Greece but was further developed during the Enlightenment in the 17th and 18th centuries. Thinkers like Thomas Hobbes, John Locke, and Jean-Jacques Rousseau popularized the idea to explain why citizens willingly form governments instead of living in a lawless state of nature.

The expression is useful because it reminds us that legitimate political authority cannot be understood merely in terms of coercion. Political authority entails reciprocal obligations. The citizen has obligations towards the political order, but the political order also has obligations towards the citizen.

Yet the contract analogy breaks down precisely where the tax question becomes interesting. In an ordinary contract, both parties have obligations and both have remedies when the other party fails to perform. Our relationship with the state is radically more asymmetrical. If a taxpayer fails to meet his obligations, SARS can assess the tax due, impose interest and penalties and ultimately invoke the coercive power of the state. If the state fails to protect his property, maintain infrastructure or provide the basic services for which it assumes responsibility, his tax liability does not decline accordingly.

The underlying point is that the reciprocal element that gives the language of a social contract its moral force has become increasingly weak. This weakness gives rise to a growing sense of unease with the political system at large.

The state has direct and powerful remedies against the citizen. The citizen’s remedies against state failure are generally indirect, slow and often entirely unrelated to the loss he has suffered.

At some point this becomes more than a question of poor administration. It becomes a question of legitimacy. And legitimacy is the cornerstone upon which a political structure ought to be built. Without legitimacy, the state can, at best, be a house of cards.

Tax resistance is not new to South Africa

South Africa has a surprisingly rich history of resistance to taxes and other compulsory public charges. These episodes occurred in very different circumstances and should certainly not be treated as morally equivalent, but they demonstrate an important historical point: governments may impose taxes by law, but sustainable taxation ultimately depends on a sufficient degree of public cooperation.

The 1906 Bambatha Rebellion in Natal was triggered in significant part by resistance to a new £1 poll tax imposed by the colonial government. The tax was not the only grievance and the rebellion became violent, but historians regard taxation as an important catalyst.

A few years later, the £3 tax imposed on former Indian indentured labourers became one of the central grievances in Mahatma Gandhi’s passive resistance campaign. The resistance formed part of a wider struggle concerning discriminatory laws, but the tax was eventually abolished in 1914.

During the 1980s, fiscal resistance took another form. The Vaal Civic Association organised a rent boycott in 1984 in opposition to higher rent and service charges imposed by the local authorities. Similar boycotts spread through townships and became an important mechanism through which the legitimacy and financial viability of local government structures were challenged.

More recently, Gauteng provided an extraordinary example with e-tolls. E-tolls were legally imposed, but public resistance was so widespread and sustained that the system became practically and politically unsustainable. At public meetings, government officials explained that more taxation is necessary, because government has a ‘funding problem’. Evidently it never occurred to them that the problem might be elsewhere.

People refused to pay e-tolls in high numbers. Once e-toll disobedience had gained sufficient traction, the momentum became unstoppable. Collection finally ceased in April 2024. In June 2026, Cabinet went further and approved the writing off of unpaid historical e-toll debt. Those who had paid would not receive refunds because the tolls had been legally due at the time.

E-tolls were user charges rather than ordinary taxes, but the lesson is difficult to miss. There is a point at which large-scale non-cooperation can make a legally enforceable fiscal scheme extremely difficult to sustain.

A very small base carries a very large burden

The present tax structure makes this question especially important.

National Treasury expects to collect about R2.127 trillion in tax revenue during the 2026/27 financial year, of which R844.8 billion will come from personal income tax. Treasury itself now acknowledges that personal income tax relies heavily on a narrow base. In South Africa, 1% of the population pays nearly 60% of the country’s income tax.

The maximum marginal personal income tax rate is already 45%. At the same time, the tax system places a substantial administrative burden on citizens and businesses. Roodt has previously described the system as efficient but ‘far too complicated’, and recent academic research has found increasing statutory complexity in parts of the Income Tax Act.

This creates a dangerous incentive structure. A government may think that a productive taxpayer is a fixed asset that can simply be taxed more whenever additional revenue is required. This is not the case. Capital can move. Skills can move. Businesses can restructure. Investment can be postponed. Entrepreneurs can decide not to expand. Citizens can emigrate.

The taxman can assess income that exists. Yet, it cannot tax the business that was never started, the investment that was made somewhere else or the entrepreneur who has left.

What would a tax revolt actually look like?

This is why a future tax revolt will probably not begin with a public campaign calling on citizens simply to break the law.

In our conversation, Roodt suggested something more subtle. Taxpayers can ‘frustrate’ the system while remaining within the law. He explicitly did not advocate tax evasion. His argument was that taxpayers should claim every deduction to which they are lawfully entitled, use legitimate objection and dispute procedures where SARS assessments are genuinely contestable, provide what the law requires rather than voluntarily making SARS’s task easier, and structure their tax affairs as efficiently as the law permits.

There is an important moral distinction here: Tax evasion involves unlawfully concealing a liability. Tax resistance does not necessarily do so.

There is nothing immoral about paying what the law requires and not a cent more. Nor is there anything inherently wrong with insisting that the state comply as strictly with its own rules as it expects the taxpayer to do.

The moral case can go further than merely saying that something is permissible because it is lawful. Legality and morality are not identical. A tax may be legally enforceable while the political order that imposes it has become excessively centralised, inefficient or unjust. There are circumstances in which resistance to such a system can be morally defensible.

That observation should not be mistaken for a casual call for illegal tax evasion. Illegal non-payment carries serious legal consequences and can have consequences for persons who depend on public services. There is already a considerable field for legitimate resistance before that line is crossed.

The real problem is excessive centralisation

The most important point, however, is that South Africa does not primarily have a tax-policy problem. The tax problem is one of the symptoms of a deeper problem in the political order.

In our analysis at Lex Libertas, we believe that a distinction between micro-political solutions – adjustments to policy within the existing system – and macro-political solutions, which concern the structure of the political order itself is necessary. Our central argument is that South Africa requires the latter: decentralisation and greater self-governance for the different communities living in the country.

The same diagnosis runs through Lex Libertas’ 2025 report entitled, Reclaiming Freedom. The recurring crises of governance are presented there not merely as separate failures, but as symptoms of a political system that is excessively centralised and disconnected from grassroots realities. The proposed response is to shift meaningful authority and responsibility away from the dysfunctional political centre and towards communities themselves.

This matters enormously for the tax debate.

A central state that assumes responsibility for almost everything must continuously extract enormous resources from society. When it performs badly, the familiar response is to demand still more money, still more programmes and still more central power. The cycle then repeats itself.

Decentralisation offers a different logic. Decisions should, as far as reasonably possible, be taken closer to the communities affected by them. Provinces, municipalities, communities and independent institutions should have greater freedom to assume responsibility for their own affairs. Public authority should be distributed rather than endlessly accumulated at the centre.

The objective cannot therefore simply be to collect less tax while leaving the same enormous centralised machinery untouched. That would be fiscally incoherent. The machinery itself has to do less. Responsibility, authority and resources must move downward and outward.

Seen from this perspective, the emerging tax revolt is neither the solution nor merely a problem. It should be understood as a warning signal. It tells us that an increasing number of taxpayers are losing confidence in the arrangement under which the central state takes more responsibility, demands more resources and yet struggles to perform even its most basic functions.

Trying to squeeze more revenue from that shrinking relationship of trust will not repair it.

A more viable tax settlement will ultimately follow from a more viable political order – not the other way round.

Ernst Roets

Dr. Roets is Executive Director of Lex Libertas