Opposition party, uMkhonto weSizwe (MK Party) has warned Finance Minister Enoch Godongwana not to continue with the proposed VAT hike, threatening that it will lead to more protests.
Image: Armand Hough / Independent Newspapers
uMkhonto weSizwe (MK Party) Parliamentary Chief Whip, Mzwanele Manyi has called on Finance Minister Enoch Godongwana to focus on increasing corporate tax rather than increase VAT, warning that failure to do so would result in more protests.
The party staged a march on Monday, in Pretoria at the National Treasury offices protesting over the proposed VAT increase.
This comes after Godongwana postponed the Budget Speech last month due to disputes within the Government of National Unity (GNU) failing to reach consensus on the proposed two percentage-point VAT increase.
Manyi said the party took to the streets because their attempts to address the issue had failed.
“Our members participate in the standing committee on Finance in Parliament and have raised these issues, but to deaf ears. We've written letters to the Minister. Nothing comes of it,” Manyi said.
“So, we are forced to be here on the streets. Our message is very simple to the Minister of Finance - we are saying no to any increase in the VAT.”
Manyi said the party strongly opposes the two percentage points, or even 0.5 percentage increase.
“We are saying nothing. In fact, we are saying we even have a scope to actually even reduce the VAT by two percentage points,” he said.
Manyi said they argue that there are other avenues that the government could use to raise money, such as supporting the South African Revenue Services (SARS).
“SARS is ready to go and rake out R400 billion. But only if they are assisted,” Manyi said.
“We are saying we must clamp down on illicit financial outflows. These multinationals use price transfer schemes to evade tax. We need to clamp down on that, along with corruption.”
Jacob Zuma's MKP has called Finance Minister Enoch Godongwana to look at increasing corporate tax rather than raising VAT.
Image: Itumeleng English/ Independent Newspaper
Manyi emphasised that the country cannot continue to tolerate fruitless wasteful expenditure without consequences.
He opposed the idea of zero-rating foodstuffs as a trade-off for a VAT increase.
“Yes, we can zero rate the foodstuff, but that must not be a trade-off to increase VAT at any level,” Manyi said.
He added that increasing VAT would immediately lead to inflation and hurt the poor, who continue to pay for essential services, like transport, and electricity even if their food is zero-rated.
“We're not interested in that. We are saying this government must exercise political will and be pro-poor.”
Manyi called for a wealth tax on South Africa's richest citizens.
“All those people living in Camps Bay must pay wealth tax and they won't even feel it,” he argued.
“Corporate tax could go up by one percentage point. It's not going to kill anyone, but it will solve the problem. So, we are saying the solutions are on the table.”
He accused the government of lacking the political will to assist the poor and said it is out of touch with the realities of poverty and inequality in the country.
“We have the highest poverty and inequality in the whole world, a government that won’t move an inch to solve that problem,” Manyi added.
He warned that if Godongwana continues with the VAT increase on Wednesday, protests will intensify.
“If VAT goes up by two percentage points or by 0.75, it would result in more protests,” Manyi said.
“Picket lines, that's all we're going to do. We're going to make South Africa come to a standstill. We're going to bring our message and do a peaceful protest,” he said.
Meanwhile, the party has also slammed the liquidation of Ithala Bank, arguing that the issues surrounding the bank's closure were solvable.
“We are saying the technicalities around Ithala Bank are not matters that could not be resolved. Ithala Bank for all these years has been servicing our people diligently,” Manyi said.
IOL Politics
Get your news on the go, click here to join the IOL News WhatsApp channel.