History is all about power, its expansion, abuse and then its limitation. Its most pervasive use is to take property belonging to others.
In modern societies the power to take property appears as the power to tax and more recently asset forfeiture (i.e. seizure) statutes. Much of history is a record of the conflict over the power to tax.
The English experience
The English Civil War started with Charles I, who wanted the arbitrary right to tax - the power to take property without the consent of the people as expressed by the Commons (in South Africa the National Assembly) and Lords. He dissolved the Commons and imposed various taxes. In the end the matter was settled in battle. The king lost the wars and his head, and for a short while England became a republic. It soon became clear that the government without a king was even worse. England restored the monarchy but the same problems persisted until William became king, bound by the Bill of Rights. So once again the rule of law was tried.
Clear rules
When it came to the power to tax, great philosophers such as Montesquieu (1748) in France and Adam Smith (1776) in the United Kingdom laid down some lasting principles, the embodiment of the rule of law applied to taxation. Montesquieu pointed out that the laws which impose tax should be so clear that they allow not the slightest doubt. 'Taxes ought to be so clearly settled as to leave no opportunity for collectors to increase or decrease them.' To him, the only way to express tax was as a fixed percentage of 'a portion of the fruits of the earth, a duty of so much per cent are the only suitable taxes' and so on.
Disturbing signs
When the position in South Africa is considered, disturbing signs are appearing. SARS is one of the few government departments which has been highly successful. But this success comes at a price of freedom and liberty. One of the recent high profile cases was the LeisureNet case. In this case the state's star witness was discredited. According to the judge, he 'was and is a liar.'
Extortion and harassment
Why would anyone go to court with the specific purpose of lying? According to the reports earlier he had been arrested charged with tax fraud and released when he agreed to testify for the state.
If this is true the it appears that the state is using taxpayers' tax affairs, which are supposed to be confidential, in a manner close to extortion. I am surprised that this incident has not been investigated. On the face of it, it is disturbing and of great public interest. In another case the tax court awarded costs against SARS because it concluded that SARS had been harassing the taxpayer.
By SARS' decree
A more disturbing feature is what appears to be the institutionalised substitution of taxation by SARS' decree rather than the rule of law. The tax legislation has become so complex that it defies understanding.
Montesquieu's statement about tax being a matter of clear law has become but a distant dream. Increasingly, SARS has been developing a system where tax is levied by the will of SARS. Only registered persons may give tax advice. Registration has always been a device for state control as in the case of Zimbabwe with registered journalists.
Power play
If a taxpayer wants a tax decision, SARS will provide a determination (at a fee). A special dispute resolution system is evoked, instead of the normal courts of the land. There are also of course general tax notices. As a point of law, I can find no authority for a retirement fund to deduct tax on amounts kept in pension funds and to pay this over to SARS.
Yet, there is a General Notice (GN) from SARS instructing this to be done. Taxes are levied by decree. It seemed to me that, as a matter of law, anyone should be able to transfer pension savings from one institution to another without any involvement of SARS and yet when it came to transferring the pension fund surplus no one could answer the question of taxation and specific legislation is to be passed.
Arbitrary power to tax
In virtually all matters of tax today, even the most mundane commercial transaction is shrouded in uncertainty, to be resolved by SARS. All of these devices undermine tax by law.
It seems to me that the power to tax is once again becoming arbitrary.