Cosatu may win tax bat­tle

Fed­er­a­tion seems to be get­ting its way on a pen­sion law it de­spises while state will re­view 17 years of trade deals

CityPress - - News - SETUMO STONE and HLENGIWE NHLABATHI news@city­press.co.za

Ahalt of the im­ple­men­ta­tion of the new tax laws by March 1 is one of the pos­si­ble out­comes in the on­go­ing ANC-sanc­tioned dis­cus­sions be­tween labour fed­er­a­tion Cosatu and Trea­sury. City Press has been told Cosatu was given a sym­pa­thetic re­cep­tion at the ANC’s na­tional ex­ec­u­tive com­mit­tee (NEC) meet­ing that ended on Wed­nes­day, which would ex­plain the cau­tiously op­ti­mistic tone adopted by fed­er­a­tion lead­ers post the gath­er­ing.

Cosatu was this week hope­ful the pen­sion re­forms would be put in abeyance af­ter the fed­er­a­tion “man­aged to get the ANC to see its point of view”.

The new tax law will en­force the an­nuiti­sa­tion of twothirds of prov­i­dent fund sav­ings on re­tire­ment from the be­gin­ning of March this year. Cur­rently, prov­i­dent fund mem­bers are able to cash out their ac­cu­mu­lated sav­ings as a lump sum when they re­tire or re­sign.

On Thurs­day – a day af­ter the pres­i­dency is­sued a state­ment declar­ing the de­bate on the new tax laws closed un­til 2018 – the ANC fol­lowed up with a state­ment en­cour­ag­ing fresh talks, while the SA Com­mu­nist Party said the pres­i­dency’s ver­sion was “con­cern­ing”.

In an in­ter­view on Fri­day, Cosatu pres­i­dent Sdumo Dlamini chided pres­i­dency staff for is­su­ing the “un­for­tu­nate” state­ment, say­ing they had acted “as if they have en­tered the political space”.

Dlamini said there was “a political process” un­der way be­tween the ANC and Cosatu in an ef­fort to ad­dress is­sues that were “not con­sid­ered well” when the law was passed.

“Such state­ments are un­der­min­ing the political pro­cesses we are un­der­tak­ing [and] it is quite un­for­tu­nate,” said Dlamini.

“The ANC can­not talk to tax­a­tion law to say it must be put in abeyance. It is govern­ment that must make that de­ci­sion, or Par­lia­ment,” he said.

He said the ANC state­ment on the mat­ter car­ried more weight and was “an ac­cep­tance that Cosatu is rais­ing gen­uine is­sues, which should be taken on board by the par­ties that are in­volved, in­clud­ing Trea­sury”.

Prepa­ra­tions were un­der way with the con­sen­susseek­ing body for busi­ness, labour, civil so­ci­ety and govern­ment, Ned­lac, for all the stake­hold­ers to meet, at a date yet to be de­ter­mined.

The ul­ti­mate so­lu­tion, he added, was for the com­plete over­haul of the law, which Cosatu claims was sneaked through Par­lia­ment with­out proper con­sul­ta­tion.

Cosatu has sched­uled a spe­cial cen­tral ex­ec­u­tive com­mit­tee meet­ing to fo­cus solely on tax-re­form de­vel­op­ments.

Dlamini said Trea­sury had writ­ten a let­ter to Cosatu on Wed­nes­day about its will­ing­ness to talk and be per­suaded.

“If peo­ple come with a so­lu­tion, we will look into that. The ideal sit­u­a­tion for us would be to re­peal the law or en­gage and reach some form of com­pro­mise,” he said.

Fi­nance Min­is­ter Pravin Gord­han’s spokesper­son, Phumza Ma­canda, said: “I can­not go into de­tail, save to say the min­is­ter is in con­tact with all role play­ers to un­der­stand their con­cerns. He is com­mit­ted to con­struc­tive di­a­logue and open en­gage­ment on the is­sues.”

Pres­i­dency spokesper­son Bon­gani Ma­jola did not re­spond to re­quests for com­ment.

Mean­while, the ANC came out of this week’s NEC lek­gotla with a sur­prise an­nounce­ment that it had de­cided to re­view all trade agree­ments dat­ing back to 1999.

ANC sec­re­tary-gen­eral Gwede Man­tashe was spit­ting fire, say­ing South Africans needed to look for other mar­kets within the con­ti­nent.

He re­lated how the coun­try needed to avert a sit­u­a­tion in fu­ture where it was be­ing “bul­lied” – as was the case dur­ing the re­cent African Growth and Op­por­tu­nity Act (Agoa) ne­go­ti­a­tions held with the US.

Agoa is a uni­lat­eral US pref­er­en­tial trade pro­gramme en­hanc­ing mar­ket ac­cess for qual­i­fy­ing sub-Sa­ha­ran African coun­tries. It has helped South Africa more than dou­ble its ex­ports to the US since 2000.

As part of its el­i­gi­bil­ity cri­te­ria, Agoa re­quires that ben­e­fi­ciary coun­tries re­move bar­ri­ers for US trade and in­vest­ment. A stale­mate be­tween South Africa and the US oc­curred ear­lier this month, re­lat­ing to an­tidump­ing du­ties im­posed on US frozen chicken por­tions.

Talks re­sulted in the depart­ment of trade and in­dus­try agree­ing to al­low a quota of 65 000 tons of US frozen chicken por­tions into the lo­cal mar­ket, waiv­ing an­tidump­ing du­ties. The US had de­manded 140 000.

Man­tashe said on Wed­nes­day “the US is not our big­gest trad­ing part­ner; China is.

“Yes, the US is an im­por­tant trad­ing part­ner but it does not mean it must bully us. We must look for other mar­kets and in­crease ac­cess in the re­gion.”

His state­ment im­plied that the ANC was up­set over how the world’s lead­ing econ­omy had flexed its mus­cles and threat­ened to cut off ties with South Africa.

Trade and In­dus­try Min­is­ter Rob Davies told City Press that, dur­ing dis­cus­sions this week, “it be­came clear that a lot of the [ANC NEC] mem­bers have not been fol­low­ing trade agree­ments and ne­go­ti­a­tions”.

“One of the things peo­ple said was that the political lead­er­ship needs to be much more in­formed about what is go­ing on on the trade front.

“I wel­come that be­cause there are im­por­tant things that hap­pen,” he said, adding this prompted the de­ci­sion “for us to look through the trade agree­ments that we are a part of [in terms of] what is hap­pen­ing ... where we need to go and how we make sure they are yield­ing max­i­mum ben­e­fit for the coun­try”.

“What we are es­sen­tially try­ing to do is to change the fun­da­men­tal ar­chi­tec­ture of trade,” said Davies.

PHOTO: EDREA DU TOIT

UNITED FRONT The Western Cape ANC held a rally yes­ter­day to com­mem­o­rate the party’s 104th birth­day cel­e­bra­tions. ANC na­tional chair­per­son Baleka Mbete was the key­note speaker. On the right is ANC leader in the city coun­cil Tony Ehren­re­ich

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