Beware, the tax man cometh

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This is the famous quote from Benjamin Franklin, one of the founding fathers of the United States.

Today, this quote still rings true throughout the world.

If there is one thing you must not do it is to play the fool with the taxman, because he is like the boogie-man, who will surely claim his prize.

In South Africa, for the next several months, we are embroiled in tax season, and while no one really likes the taxman, it is not wise to cheat, avoid or deceive Sars. It is a simple fact.

Just ask Julius Malema who, for all his bravado, is facing all kinds of trouble as he complies with the provisional sequestration order against him, which has been extended to December 1.

He owes Sars around R16-million, and therefore needs to pay back R500 000 every month, with R30 000 also deducted from his MP’s salary every month.

In 2010 Sars contacted Malema about his failure to submit tax returns; it seems Malema had failed to register his Ratanang Family Trust for tax purposes. Sars then attached some of Malema’s property, including a farm in Limpopo and a house still under construction in Johannesburg, to recoup the taxes he owed.

Of course, what counts in Malema’s favour, is that the trust was launched to collect funds to helps settle the debt.

But it’s not just in the 21st century that we sweat over taxes and where people of renown or of less fame get burned for trying to con the taxman.

Taxes, after all, are part and parcel of world history.

For example, in times of war, the Athenians imposed a tax referred to as eisphora. No one was exempt from the tax which was used to pay for special wartime expenditures.

Athenians also imposed a monthly poll tax on foreigners, people who did not have both an Athenian mother and father, of one drachma for men and a half drachma for women.

During the Roman Empire, the earliest taxes in Rome were customs duties on imports and exports called portoria. Caesar Augustus was considered by many to be the most brilliant tax strategist of the Roman Empire.

If one studies history, it is clear that it has always driven people crazy to have to pay taxes, especially those weird taxes which appeared to be introduced just to irritate the citizens.

For example, during the various reigns of the Egyptian Pharaohs, tax collectors (known as scribes) at one stage imposed a tax on cooking oil.

To ensure that citizens were not avoiding the cooking oil tax, scribes would audit households to check that appropriate amounts of cooking oil were consumed.

During the 1st Century AD, Roman Emperor Vaspasian placed a tax on urine (can you imagine). The urine from public urinals was sold as an essential ingredient for several chemical processes, such as in tanning hides and also by launderers, as a source of ammonia to clean.

England has also had its fair share of weird taxes, such as in 1789, when they introduced a tax on candles when people were forbidden from making their own, unless they obtained a licence and then paid taxes on the candles they produced.

In 1795, England put a tax on the aromatic powders that men and women put on their wigs, which led to a dramatic decline in the popularity of wigs.

Salt was a very popular item to tax, because consuming it is necessary to humans. The British placed a tax on salt, and the salt tax gained worldwide attention when Ghandi staged non-violent protests against it. Great Britain also didn’t repeal its soap tax until 1835.

Taxes have, therefore, been with us for centuries. Even one of the 12 disciples of the Bible, Matthew, was a tax collector.

To be honest, no one really likes to pay taxes, but it is something we cannot avoid. Even Jesus demonstrated the worth of paying the ruler of the land his due when he asked Peter to pay the temple tax.

The fact remains that history attests to the fact that no matter who you are, how clever you think you are or who you know, it is better to pay the taxman — and in a legal way.

Look at the notorious gangster “Al” Capone, who attained national notoriety during the Prohibition era. His seven-year reign as a crime boss ended when he was 33 years old. And what got him? Taxes!

The only way the federal authorities could stop his reign of terror was to prosecute him for tax evasion in 1931. Capone was convicted and sentenced to a then record breaking 11 years in federal prison.

And then you have numerous celebrities who have tried their luck, like Nicolas Cage who, in 2009, was hit with a lien of over $6-million (by today’s standards about R60-million) by the IRS for delinquent taxes, interest and penalties, and received a separate lien for unpaid property taxes.

In the 1990s, Wesley Snipes was a popular box-office attraction, but he failed to file tax returns between 1999 and 2006. Prosecutors claimed that, during those years, $38-million (around R400-million) worth of income had gone unreported.

Thus, gangsters, politicians and celebrities have never and will never be above the law of taxes, never mind the man on the street.

It is a lesson well learned and one that reminds us that, while Sars keeps a beady eye on us, death and taxes are unavoidable and best treated with respect.