MENU

Stop the VAT hike

sign sign
Stop the VAT hike
Stop the VAT hike
55,639 SIGNATURES
70,000 signatures required

Finance Minister Malusi Gigaba announced a proposed Value Added Tax (VAT) increase of 1% during his 2018 budget speech [1] Despite massive criticism, the Minister, and some economists, have claimed that this increase will not affect the poor [2] because there are 19 basic food items that are zero-rated. But people cannot survive on only 19 types of food and also need school uniforms, sanitary pads, toiletries and many other things that are not VAT exempt. What is more government could instead redouble efforts to crack down on some ultra rich South Africans and companies who are avoiding paying tax [3]. We all have to pay our fair share.

We know that this will hit the poorest the hardest, even ANC MP and Finance Committee Chair Yunus Carrim has stated, that the ANC caucus didn’t want the VAT increase because of the impact it would have on the poor [4].

What many of us don’t know is that we the public have a right to give input into the proposed VAT increase and we can force members of parliament to hear our voices and reject it.

The VAT increase is part of the “Fiscal Framework and Revenue Proposals” which is open to public comment, though the deadline is this Monday 26th February. There are also public hearings to be held at Parliament on Wednesday 28th February [5] before Parliament must vote to pass the VAT increase in the following week. This is too short a notice for any meaningful engagement by the public, and the Standing Committee must extend the deadlines. However, this may not happen, so we must ensure we still make as many public submissions as possible to the Standing Committee on Finance, and then begin the work of applying pressure on all political parties, especially the party with the most MPs which could determine whether the VAT increase happens or not: the African National Congress.

Even though the increase in social grants and in pensions is above the inflation rate, these increases will be swallowed by this VAT increase together with the 52c a litre increase in the fuel levy. Those in favour of the VAT increase also argue that there at 19 basic foods that are zero rated, meaning there is not VAT added to these products. But the poor will still be hit hard by this VAT increase because it will increase the cost of sanitary products, school supplies, clothes and countless other items necessary for a dignified life. We can stop this VAT increase if we engage in the Parliamentary process and ensure our leaders truly represent the people.

Already over 36 civil society organisations have rejected the proposed VAT increase and called for taxing the wealthy [6], while a further 23 civil society organisations have also raised concerns and called for comprehensive consultation among other demands [7]. 

Dear Hon. YI Carrim, MP, Chairperson: Standing Committee on Finance (National Assembly) and Hon. CJ De Beer, MP, Chairperson: Select Committee on Finance (National Council of Provinces), Mr Allen Wicomb and Ms Teboho Sepanya (Secretaries on the Select Committee on Finance), Finance Minister Gigaba, Jackson Mthembu (ANC Chief Whip), John Steenhuisen (DA Chief Whip), Nyiko Floyd Shivambu (EFF Chief Whip) Nqabayomzi Kwankwa (UDM Chief Whip), Deidre Carter (COPE Chief Whip), Cheryllyn Dudley (ACDP Chief Whip), Narend Singh (IFP Chief Whip), Zanele kaMagwaza-Msibi (Leader of the NFP), Pieter Groenewald (Leader of FF+), Mike Tshishonga (Acting Agang Leader), Luthando Mbinda (PAC Leader), Themba Godi (President of the APC) and all members of the National Assembly and National Council of Provinces.

We call on you to firstly extend the deadline for public submissions on the Fiscal Framework and Revenue Proposals that were tabled together with the 2018/2019 Budget. This call for submissions was made on the 21st of February 2018, yet the majority of the country do not know that public submissions are allowed, and 3 working days notice to make a public submission is nowhere near enough time for public comment.

Secondly, we the undersigned completely reject the proposed VAT increase and call on you as our elected leaders to scrap the VAT increase for the 2018/2019. The Standing Committee on Finance should consider each of the undersigned names as an individual submission which categorically rejects the VAT increase in the Fiscal Framework and Revenue Proposals.

We join the call with 35 civil society organisations rejecting the VAT increase, and advocating for "other ways of raising revenue include increasing personal income tax on high income earners, increasing the corporate tax and implementing a carbon tax. Increasing, sin and sugar taxes should also be considered. All of this should make it possible to relieve the burden on the poor, and get rid of regressive tax policies in opposition to mainstream economists who are calling for VAT increases" [6].

 

[1] http://www.treasury.gov.za/documents/national%20budget/2018/speech/speech.pdf

[2] Gigaba slams claims that ‘vat hike will hurt the poor’, Gaye Davis for EyeWitness News. Feb 22, 2018.

[3] Parliament: Illicit financial flows and the history of disappointment. Greg Nicolson for the Daily Maverick. August 2017

[4] ANC caucus didn't want VAT hike, Staff reporter for Mail&Guradian. Feb 22, 2018

[5] https://pmg.org.za/call-for-comment/639/

[6] 36 Civil Society Organisations reject proposed increase in VAT: Tax the wealthy to invest in our future! By AIDC. Feb 21, 2018.

[7] Civil society calls on Parliament to support progressive taxation and halt proposed regressive measures.

Will you sign?


We can still stop the VAT increase if we submit enough public comments before 12pm Monday 26th February and put pressure on Members of Parliament to reject the VAT increase. Already some ANC MPs and opposition parties have raised concerns over the VAT increase.