Biblical principles are the foundation for the creation of wealth (Deuteronomy 28).
The ACDP shares the following economic objectives with all South Africans:
- a peaceful and crime-free society;
- a substantially lower uniform tax rate;
- marked improvement in the value of the Rand;
- greater employment and self-employment opportunities;
- sustained high growth rates for the South African economy; and
- improved quality of life for all, especially, the poor.
The ACDP is therefore committed to:
- reducing government debt and spending;
- job creation and economic growth through an open-market policy with as little government interference as possible;
- becoming competitive in a global economy and a global market;
- lowering inflation;
- state enterprise operating in open competition with private providers;
- a flat-rate rate taxation of less than 10%; and
- doing away with complicated tax forms, laws and expensive monitoring mechanisms.
The ACDP will place the elimination of inflation at the top of its list of economic priorities that are aimed at achieving a rapidly growing economy.
The ACDP intends to bring inflationary money creation to an end.
State enterprise will be required to operate in open competition with private providers. They will ensure their continued existence by providing a superior service to the public.
The Party is totally committed to ensure a flat rate of taxation, thus allowing every South African the rightful fruits of their labour.
In addition, this system will do away with complicated tax forms, laws and similar expensive monitoring mechanisms.
The ACDP believes that South Africa is ripe for an economic transformation and we are convinced the goals outlined above can and will be achieved under an ACDP government in conjunction with the taxation principle TEAL (Total Economic Activity Level).
The present taxation system in the country is considered excessive by majority of the taxpayers and has resulted in hindering creativity and initiative by penalising success.
Self-interest is a powerful motivating force and there is no doubt that people will work harder, longer and produce better quality workmanship when a taxation system allows them to retain a far greater share of the fruits of their labour.
TEAL makes this possible without placing an undue burden upon the poor.
Total Economic Activity Level (TEAL)
This is a flat rate of taxation based on the Total Economic Activity Level of individuals and corporate bodies.
It is a move away from personal tax, to tax on transactions and will ensure:
- privacy with regard to income and expenditure of citizens;
- reduced need for a large bureaucracy;
- fairer tax collection;
- substantial tax reduction but increased revenue for government;
- no more tax forms etc. (transfers done by banks electronically); and
- a larger and fairer tax base
With TEAL being introduced VAT will no longer apply, and therefore most goods and services will immediately be 12% cheaper.
Take-home pay will increase to the extent that provisional taxes will fall away; PAYE will no longer be deducted.
TEAL will benefit the underprivileged as much as the rich.
The greater portion of TEAL revenues will come from the transactions of institutions, companies and organisations, wealthy individuals and middle-income people.
The low-income group, the unemployed and the squatters will pay little because they have little to spend. The VAT rate will drop which will benefit the poor.
A high percentage of state expenditure will be directed towards projects in which only the latter group will benefit (education, housing, creation of jobs and socio-economic development schemes), so this preferential distribution of expenditure will lead to visible and significant re-distribution of wealth in a structured and efficient manner. The focused direction of funds to where they are really needed will have a direct effect on the poor, rather than relying upon a trickle down effect, as is currently the case. Based upon current levels of activity it will be possible to subsidise food for those living under the bread-line.
As more jobs are created, more disposable income will be spent, resulting in higher TEAL revenue, leading to more development, and so the upward spiral of prosperity will continue.
The prices of petroleum products will fall sharply, which will benefit every aspect of the economy, and bring relief to us all and particularly to the transport and motor manufacturing industries.
A reduction in transport costs will lead to lower input costs across the whole economic spectrum, resulting in lower whole sale and retail selling prices.
Because TEAL will be applied to the source of each transaction, the balance is free of any further State tax and represents the entire ‘take-home’ package, so the end of the tax year will pose no problems.
Long and complicated tax returns will be a thing of the past.
Simple and brief summaries of earnings and expenditure will satisfy statistical requirements and there will be no reason whatsoever to be dishonest.
There will be no inequalities or disadvantages in taxation for married women, for the first time they will be treated fairly.
Unsophisticated entrepreneurs in all ethnic groups will no longer need to be bewildered by complicated forms, procedures and requirements of VAT, PAYE and SITE, not to speak of the income tax forms themselves. The introduction of TEAL will greatly simplify their lives.
The extremely low rate at which TEAL will be levied will effectively nullify evasion and avoidance by the public.
Because TEAL will generate sufficient revenue to balance the budget, there will be no tax need to obtain revenues from any other sources, but because of the danger of dumping it will obviously be necessary to maintain some import and excise duties.
The question of ‘excessive government spending’ is much in the news these days.
The provision of adequate funding for socio-economic programmes including housing, health-cure, social pensions, roads, railways and communications is clearly the function of the central government, but it is ‘the people’ who should have a say in the extent of that funding.
The simplicity of TEAL will enable it to be understood by all, and through efficient, transparent and continuous monitoring of expenditure, they will be aware of what is happening to their levies.
The implementation of TEAL will immediately result in additional disposable income. Regardless of whether people spend more or save more, the result will be growth.
Perhaps one of the most important long-term benefits the people of South Africa will derive from TEAL is that it will enable existing standards to be maintained (even improved), while at the same time dramatically upgrading the living standards of the underprivileged.
With TEAL it is possible to achieve a ‘win and grow’ scenario in South Africa instead of a ‘lose and decline’ situation.