May 18 was Tax Freedom Day in South Africa. Do I hear you asking why this could not be on January 1? “Hear, hear!” is all I can say. Tax Freedom Day in 2019 did not come soon enough. If anything, it should not be celebrated on the 138th day of the year – definitely not.

So, how does this year’s Tax Freedom Day compare with previous Tax Freedom Days? Comparisons remind me of the time when I lectured economics 110 and entertained students’ questions during their very first economics lecture. The question that took centre stage was what the pass rate for the previous year’s class had been. In response, I tended to make up a number, usually between 55% and 60%, which the students ‘foolishly’ appreciated. I then asked them whether this was a good pass rate, and they tended to believe it to be. My follow- up question was: In comparison to what?

According to the Free Market Foundation (FMF), in 2018, Tax Freedom Day was ‘celebrated’ on May 13, or five days earlier than this year. Any guess as to when it was ‘celebrated’ in that watershed year in South Africa – 1994? Earlier or later than in 2019? Earlier – in fact, 37 days earlier, on April 11, 1994. This, in itself, is a very worrying trend, no matter how trivial you perceive Tax Freedom Day to be in its conceptualisation and design.

According to www.businesstech.co.za, Tax Freedom Day marks the first day in the year when South Africans have, or the nation as a whole has, theoretically earned enough income to pay taxes.

An extremely worrying fact for all South Africans is that the FMF expects that the trend of Tax Freedom Day falling later and later in the year is set to continue; the foundation cites the 2019 Budget speech as suggesting the same. The FMF adds that, while taxes have been trending upwards, economic growth has been trending in the opposite direction. Consequently, South Africans have had to carry an increasingly bigger tax burden while getting poorer.

If you prefer the cold, hard numbers, if Tax Freedom Day fell on January 31, the South African government would have raked in only 8.5% in average incomes, and not the 37.8% that it actually did.

Just in case the numbers do not move you, according to www.businesstech.co.za, the FMF calculates the numbers annually by dividing general government revenue by the gross domestic product at market prices, and then multiplying the result by the number of days in a year, and finally adding a day to derive the first day on which South Africans are theoretically done with paying tax.

As eluded to by www.businesstech.co.za, the FMF recognises that general government revenue does not include State-owned enterprises (SOEs) such as Eskom. If the SOEs were included in the FMF’s calculation, Tax Freedom Day would still be a month away. If you are into the numbers, this would equate to a tax burden for South Africans of 46.6%.

What I am about to tell you would have solicited this response from my famed first-year economics professor: “Sir, you have a knack for the obvious.” But, for the sake of completeness, let me just say it: South Africans pay too much tax – way too much.

To put it differently, the South African government taxes its people excessively, more so if you consider what South Africans obtain for the taxes that they pay. Consider your own situation – what you are receiving in return for the tax that you are paying is very little, I would guess.

It is simply not realistic to expect the South African economy to grow when tax rates are at their current levels. Increasing taxes is not the solution; it has never been – it is the problem.