The South African Communist Party (SACP) has vehemently opposed alleged plans to hike value-added tax (VAT) from 15 percent to 16 Percent when Finance Minister Enoch Godongwana tables the 2024/2025 budget on Wednesday.
The communist party says the fact that the mooted move was reported by some media houses appears to form part of a wider propaganda campaign driven by a certain circle within the National Treasury.
“This circle is pushing to increase VAT further after it was hiked from 14 per cent to 15 per cent in April 2018 against the explicit wishes of the working class. The May 2024 election manifesto that we, as Alliance partners, endorsed commits the government to tackling the cost-of-living crisis by prioritising “food security, including through VAT exemption on essential items” – not increasing VAT,” the SACP said.
It added that the National Treasury must introduce a wealth tax and a more progressive tax approach, focusing on generating revenue from the rich and wealthy to fund development and key priorities amid the high rates of inequality that characterise South Africa.
“This measure is essential for redistributing resources and addressing the deeply entrenched disparities in income and opportunity. It will also ensure that the burden of funding public services is more equitably shared, promoting social cohesion and shared economic growth in line with the Freedom Charter’s clarion call, “The people shall share in the country’s wealth,” it said in a statement.
The communists stressed that instead of increasing VAT and entrenching austerity measures – marked by budget cuts and negative average medium-term expenditure growth affecting critical developmental priorities.
“To achieve this, the government must lead by example by investing directly in the economy, rather than relegating key leaders to uncritical marketing agents for private capital.”
ActionSA has added its voice in opposing any attempts to hike taxes.
The party’s MP, Alan Beesley said he firmly opposes any tax increases unless accompanied by deep cuts to government luxuries, including cabinet perks and redundant state functions such as deputy ministers.
South Africans cannot be expected to shoulder higher taxes—whether VAT, personal income tax, or company tax—while state corruption and mismanagement continue unchecked.
“While VAT may be the most effective of the three main taxes, it disproportionately harms the poorest and most vulnerable. For too long, citizens have paid the price for government failures, from collapsing service delivery to skyrocketing electricity costs.
“Electricity tariffs have surged by 135% in eight years, yet the average income has grown by less than 10%. Another 12.7% hike last month, approved by NERSA, has pushed households and businesses to the brink. ArcelorMittal South Africa cited unsustainable electricity prices as a key reason for shutting its long steel business, threatening up to 100 000 jobs,” Beesley said.
