Proposed VAT increase a disaster for the poor: Contralesa

Representational image of tax.

2 minutes

The Congress of Traditional Leaders of South Africa (Contralesa) says the proposed Value-Added tax (VAT) increase will be disastrous for the poor in the country.

Contralesa President Kgoshi Mathupa Mokoena commended political parties in the Government of National Unity (GNU) who opposed the proposal.

The tabling of the budget was postponed for further deliberations on contentious issues that included the proposed VAT increase.

A revised budget speech will be tabled on 12 March. Mokoena says it is shocking that the tabling of the budget was postponed.

“Contralesa is shocked and surprised that for the first time in the thirty years our democracy, the Finance Minister failed to present the budget in Parliament. Consultation about this budget should have happened a long time ago. It is shocking and uprising that some GNU members were only consulted this morning on the day of the tabling of this budget.”

“Contralesa is vehemently opposed to the proposed increase in VAT and that is going to be disastrous to the poor in this country. We thank all those opposition parties who rejected this increase, something that led to the failed tabling of this budget. We now want to know which organisation is supporting this increase,” Mokoena adds.

VIDEO | In a statement the DA says the postponement of the budget is a victory for South Africans as it prevents the VAT increase:

Meanwhile, civil society organisation Budget Justice Coalition says that implementing the VAT increase could have sparked social upheaval among already economically burdened and impoverished communities.

“When we saw the VAT increase by 2%, my heart just fell, because I just anticipated social upheaval. I think we know that in this country, South Africans are bearing such a heavy burden of the economy, and economic situations. We know our poverty rates are persistent, unemployment hasn’t been eradicated at the rate that it should be – and can you imagine this, in addition to that higher cost of living – that would have been crazy,” says the coalition’s chairperson Matshidiso Lencoasa.