As head of the South African Revenue Service, Pravin Gordhan is the man who sees that the state gets its slice of your money. Who is he and how does he handle his own finances?
Pravin Gordhan is the man to thank for the tax cuts of the past couple of years. As head of the South African Revenue Service, he's the taxman we love to hate, but one of his early achievements has been the policy of filling the state's coffers by tightening up revenue collections instead of raising taxes.
Durban-born Gordhan was a key member of the anti-apartheid movement and lived in hiding for years. Before taking over the running of the country's tax system, he was an ANC member of parliament closely involved with the drafting and implementation of our Constitution. Gordhan is a man of few words and even fewer lifestyle frills.
How much cash do you have in your wallet right now?
About R250.
How many credit cards do you carry?
Two. I use one and the other is a back-up. I don't really use the credit facility much, though. I use the cards because it gives me better control and transparency in managing my finances.
Do you own shares?
I've never bought shares. I inherited some shares a while ago. I've tried to track them down, but I'm too busy the process of getting shares registered and obtaining copies of share certificates is cumbersome. It could be simpler. You have to produce all sorts of documents. I lost all documents and records in my former life as an activist, operating underground.
Do you own the property in which you live?
Yes, I do own our family house here in Pretoria. I also have a house in Durban, which I am trying to sell. I came out of detention in October 1990 and I had just started working for an NGO when the manager of the local bank phoned me and offered me an account with an overdraft facility. I bought the house in Durban with the overdraft facility.
Have you ever been short of cash?
I can live with very little. I've spent long periods with no formal job, in spite of being a pharmacist, and I had to settle for small allowances and help from comrades then. So I learned to get by with a meagre sum of money in the 1970s and 1980s.
What is the best investment you have ever made?
The houses. They have given my family a roof and some certainty about their future. I led a nomadic life for 20 years and it was hectic politically. Having a house to live in gives stability to our lives and offers us a base to build a new sense of family. Political activism has interfered with many things
What is the worst investment you have ever made?
I don't know. I haven't made many investments.
What was your most extravagant purchase ever?
Extravagant? Well, I bought a new car two months ago. I have always had small cars, but this one is bigger.
Do you belong to a retirement fund?
When I was in Parliament in 1994 I joined the parliamentary pension fund and when I came here to the South African Revenue Service (SARS) I put that money in a preservation fund. Only recently have I invested in retirement annuities.
How many hours a day do you work?
Ten to twelve hours a day in the office, more at home.
How much leave do you take a year?
I get 20 days, but I've taken very little so far. Last year there was the whole Y2K worry - I could not take leave.
Where do you go on holiday?
When I can, I go back to Durban or somewhere else on the coast. I'm hoping that once this current intense period of work is over I can relax a bit more. But we are so busy at the moment fundamentally transforming the tax and customs administration, and preparations for the implementation of capital gains tax will take up so much time until next April, that I don't think I'll be able to take any substantial leave.
Do you manage your own financial affairs?
As a pharmacist I didn't know too much about finances, so when I was a member of parliament I got an adviser who helped structure my finances: life assurance, retirement annuities, unit trusts and so on.
Do you fill in your own tax return?
No, my financial adviser does. This is right because it means there is a distance between my personal affairs and my work. The adviser can deal with any queries from the SARS. Also I have to admit that our tax forms are still far too complex for normal individuals to fill in - although we have improved them substantially. I hope within two years we will have simplified the forms to a point where most people can manage on their own, if they want to.
Have you always paid your taxes on time?
In the apartheid years I mostly didn't earn money to pay taxes, but from 1974 to 1981 I worked in King Edward Hospital in Durban and I paid Pay As You Earn (PAYE). We had a slogan then, taken from the United States, No Taxation without Representation. It is a good slogan but most people employed in South Africa were hostage to the PAYE system and had no choice about paying taxes. Since I've been in Parliament and at SARS, my returns have always gone in timeously.
What annoys you most about our tax collection system?
It always amazes me how many people go out of their way to concoct schemes to defraud the democratic state. Our country is in dire need of every bit of the resources we can command to create a better life for all of us. There are millions of people dedicated to this, yet there are those who are equally dedicated and working relentlessly in the opposite direction, purely for personal gain. Some very wealthy South Africans apparently pay only a few thousand rands a year in taxes. And it is disappointing that not enough tax professionals see this as an ethical issue. In South Africa, tax planning and ethics can't be separated because of the huge backlog in providing services. If we don't want to fall into some sort of debt trap, the revenue we collect has to be the basis for building the country. Tax professionals should be asking what their role can be in building democracy in South and southern Africa.
What do you do in your spare time?
I like walking, I like watching sport on television - cricket, football, golf, tennis and car racing, which I've enjoyed for decades. I also read - the financial press, books about change and change management, the odd novel. And I like to spend time with my family - my wife Vanitha and daughters Anisha and Priyesha.
What do you like about your job?
The challenge and the opportunity to transform the SARS in a way that can make a huge difference and benefit every sector of the population. It's stimulating, it's sometimes intimidating and awe-inspiring in terms of the magnitude of the task, but we have a growing team of people committed to the process.
Do you buy lottery tickets?
I've bought one. But I didn't win!
This article was first published in
the October 2000 issue of Personal Finance magazine. See what's in our latest issue