Work­ers de­mand VAT cush­ion

Sunday Express - - FRONT PAGE - Mo­halenyane Phakela

AFACTORY work­ers as­so­ci­a­tion, the In­de­pen­dent Demo­cratic Unions of Lesotho (IDUL), has pleaded with the gov­ern­ment to gazette a salary in­cre­ment that will cush­ion work­ers against the ero­sion of their dis­pos­able in­come by the re­cent in­creases in value added tax (VAT) and planned hikes by trans­port op­er­a­tors. In a re­cent in­ter­view with the Sun

day Ex­press, IDUL board mem­ber, Rathakane Rathakane, said that while they were look­ing for­ward to a salary in­cre­ment in the new fi­nan­cial year which be­gins on 1 April, they were how­ever, con­cerned that the re­cent in­creases in VAT.

Fi­nance Min­is­ter, Moeketsi Ma­joro, an­nounced the VAT in­crease to 15 per­cent from 14 per­cent dur­ing his bud­get speech in par­lia­ment.

Dr Ma­joro also pro­posed to grad­u­ally in­crease VAT on telecom­mu­ni­ca­tions and elec­tric­ity, which presently stand at 5 per­cent to align to the uni­tary rate of 15 per­cent. This com­ing fi­nan­cial year the VAT will be in­creased by 4 per­cent for telecom­mu­ni­ca­tions and 3 per­cent for elec­tric­ity.

Ac­cord­ing to Mr Rathakane, “The VAT in­crease is very dis­turb­ing to fac­tory work­ers who are al­ready earn­ing mea­gre salaries”.

“Work­ers have to pay rent, school fees and buy gro­ceries from the lit­tle they earn. It is very dif­fi­cult to un­der­stand how the work­ers sur­vive.

“Apart from the other prices which are sub­ject to change, trans­port op­er­a­tors have al­ready re­vealed that they are de­mand an in­crease in the taxi fare from M6 to M15.

“This is a huge blow to the fac­tory work­ers who al­ready forced to walk long dis­tances to and from work be- cause they can­not af­ford even that M6 or the dis­counted fare of M5. If they can­not af­ford M6 or M5, what more if the price in­creases by 150 per­cent?”

A gen­eral fac­tory worker and a trainee ma­chine op­er­a­tor who have been work­ing for less than a year in Lesotho, each earn M1 238 per month while a sewing ma­chine op­er­a­tor earns M1 331. The gen­eral worker who has worked for more than a year earns M1 372 while a ma­chine op­er­a­tor earns M1 456. Lesotho has 55 tex­tile fac­to­ries and six of these are lo­cally-owned, 17 South African-owned, eight are Chi­nese-owned and 24 are owned by the Tai­wanese.

80 per­cent of the fac­to­ries ex­port their goods to Amer­ica and the rest are ex­ported to South Africa.

While wel­com­ing for­eign in­vest­ment, Mr Rathakane how­ever, be­moaned the low salaries which are way be­low those of­fered in China, South Africa and Tai­wan.

Re­search has shown that the min­i­mum wage in China is RMB2 300 (M4 300), NT$22,000 (M8 600) in Tai­wan and R6240 (M6240) in South Africa.

“When­ever we de­mand salary in­cre­ments, we are told that the ‘ridicu­lous’ amounts that will chase away in­vestors. We un­der­stand that but in these in­vestors’ home coun­tries the ba­sic salaries are way higher than those of our coun­try. We have there­fore asked the gov­ern­ment to en­sure that work­ers are paid at least half of those paid in the in­vestors’ home coun­tries,” Mr Rathakane said.

In the 2017/2018 fi­nan­cial year, the fac­tory unions were at log­ger heads with the gov­ern­ment de­mand­ing a 9 per­cent in­cre­ment while the gov­ern­ment of­fered 7 per­cent.

Mr Rathakane said that they were still await­ing judge­ment over the is­sue as they had taken the mat­ter to court. He said they were also in talks with the gov­ern­ment re­gard­ing the in­cre­ment which will be ef­fected on 1 April this year.

“We asked that when they re­view the ba­sic salary, the gov­ern­ment should con­sider the in­fla­tion rate as well as the con­di­tions at the fac­to­ries,” he said.

FAC­TORY worker dur­ing the match in this file pic.

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