'You are playing with fire‚' Cosatu warns government on VAT increase
The Congress of South African Trade Unions has threatened to take to the streets if the National Assembly doesn’t reject the proposed increase of the value-added tax (VAT).
Speaking after their three-day central executive committee (CEC) meeting which concluded on Wednesday‚ Cosatu said they would not sit and fold their arms when the poorest of the poor will suffer the most.
"If we were going to be quiet‚ we would have allowed a situation where nobody raises this matter because this issue is a problem. It's a direct punishment of the poor and making the poor to continue to subsidise the rich in this country‚" said Cosatu's president S'dumo Dlamini.
"The reason why for the past 25 years there has been no VAT increase is because serious fights were led in the early 1990s against a VAT increase. So we are reminding our government in case they are forgetting that particular issue: You are playing with fire on this one‚ we are not going to keep quiet about it‚" he warned.
He was speaking at the trade union's head offices in Braamfontein‚ Johannesburg on Thursday.
Then-finance minister Malusi Gigaba said the proposed increase of VAT as well as income tax was to ensure to ease a budget shortfall which stands at a R48.2-billion hole in the State budget‚ and increase revenue.
Gigaba said that other tax increases that will hit citizens' pockets also include a 52 cents per litre increase in the levies on fuel‚ made up of 22 cents per litre for the general fuel levy and a 30 cents per litre increase in the Road Accident Fund levy‚ and an increase in the alcohol and tobacco duties of between six and 10 percent.
“We call on parliament to either reject the VAT increase or to expand the basket of zero-rated goods. We have made our submissions to parliament yesterday and if we do not get any positive response‚ we will mobilise workers [to] strike against the VAT increase‚” said Cosatu’s secretary general Bheki Ntshalintshali.
“Cosatu rejects the proposed increase of value-added tax by one percentage point from 14 to 15 percent and the proposed increase in the fuel levy by 22 cents per litre and of the road accident fund levy by 30 cents per litre effective in April 2018‚” said Ntshalintshali.
Cosatu also demanded that all food items‚ water‚ books‚ electricity and school uniforms would be zero rated.
On Monday‚ the South African Communist Party decried the VAT increase‚ warning it marks the possible beginning of a “regressive creep”.
Newly elected minister of Transport and SACP leader Blade Nzimande said his party would be campaigning to ensure that by the time of the next budget the VAT increase would be rolled back‚ and that other measures must be found to address the deficit‚ including "active recovery of billions of stolen capital".