The Economic Freedom Fighters (EFF) leader Julius Malema has called on the Government of National Unity to implement a wealth tax instead of taxing the poor with added VAT.
Malema addressed the media following the postponement of the Budget Speech last week. The speech was delayed due to disagreements over a proposed two percentage point increase in VAT.
The party has pledged to oppose any tax increases that target ordinary citizens and low-income earners.
The EFF pointed out that the government increased VAT from 14% to 15% in 2018, claiming it was a temporary measure to address the effects of COVID-19, according to the party’s treasure-general Omphile Maotwe.
However, the VAT increase in 2018 by former finance minister Malusi Gigaba was enforced to make up a R23 billion budget deficit before the coronavirus pandemic.
Malema said a further increase to the VAT was unacceptable.
"We don't care whether you reduce the tax on certain items or not; the poor will still have to buy items that are not exempt from the tax increase, which will burden the masses of our people," Malema said.
Malema said that the government should focus on addressing the rising cost of living rather than making life more difficult for millions while protecting the wealthy.
The EFF has also expressed uncertainty about the Democratic Alliance's position on this VAT increase, suggesting that if they opposed the tax hike, they would have permitted the budget discussion to take place in Parliament. Malema believes that this disagreement might be merely superficial.
Malema has called on the Treasury to increase corporate taxes and introduce a wealth tax to generate more revenue for the State, rather than relying on regressive taxes that disproportionately affect the poor.
The EFF argues that even if the Minister of Finance, Enoch Godongwana, were to exempt some essential items from tax, the poor would still be negatively affected.
This is because not all essential items would be free from the tax increase, leaving many basic necessities subjected to higher tax rates. Godongwana is expected to present a revised Budget on March 12.
IOL