A Pietermaritzburg-based advocacy group is against an increment of Value Added Tax (VAT). The Pietermaritzburg for Economic Rights and Dignity (PMBEJD) says this will put a further strain on the poor and economically marginalised.
The organisation says it would rather see a further increase of the social relief grants and old age grants as this will bring relief to households in a stagnant economy.
The views come ahead of Finance Minister Enoch Godongwana’s budget speech on Wednesday afternoon.
The budget speech was postponed two weeks ago following a stalemate between the Government of National Unity’s major partners, the African National Congress and the Democratic Alliance, on whether or not to increase the VAT.
The spokesperson for the PMBEJD, Sibusiso Mbotho, says the VAT increase will further burden the poor.
“Any suggestion of a tax increase at the moment is premature, because our belief is that, VAT as it stands, makes everything unaffordable and if you are going to extend it whether by 0.5% or 2% it’s going to really suffocate poor people because at the end of the day, VAT is applicable across the board and poor people just like everyone else need to buy airtime, they need to buy food and they need all sorts of things, and therefore any talk of VAT at the moment is a no go area for us.”
VIDEO| Political parties have been engaging on the proposed VAT increase:
‘No hope for jobs’
The youth in Umlazi in KwaZulu-Natal say they have lost faith in the budget speech, arguing that if the government increases VAT, there will be no hope for employment.
Nokulunga Jele says a VAT increase will also widen the gap between the poor and the rich.
High cost of living
In the Free State, Tshepo Matsaba, Provincial Chairperson of the National African Federated Chamber of Commerce and Industry, hopes the Finance Minister refrains from increasing VAT, citing the already high cost of living.
Matsaba emphasises the need for more businesses to be established to foster job creation and urges the minister to facilitate better access to funding for small businesses.
