Tax on graduates mooted to ‘plough money back’
● Higher Education Minister Hlengiwe Mkhize says the government is considering whether to introduce a tax on graduates to fund free higher education.
Mkhize’s comments to this effect come after the announcement by President Jacob Zuma yesterday that from next year all new first-year students who come from poor and working-class families will qualify for free higher education.
The move will also benefit current and new students attending South Africa’s 50 public technical training colleges.
The government defines poor and working-class students as those from households with a combined annual income of less than R350 000, which would typically include the children of social grant recipients, domestic workers and entry-level civil servants such as teachers, nurses and policemen.
Zuma also announced that students from households earning up to R600 000 a year will not have to pay the 8% tuition fee increase next year.
Loans already extended to existing students by the National Student Financial Aid Scheme will be converted into grants for their further years of study.
178 961 UNIVERSITY STUDENTS were supported by the National Student Financial Aid Scheme in 2015
985 212 STUDENTS enrolled at South Africa’s 26 public universities in 2015
Mkhize told the Sunday Times she would welcome the introduction of a graduate tax.
The government wanted to find interventions that would make young people aware that free education “was not another grant system like the South African Social Security Agency”, she said.
“This is assistance to young people to acquire knowledge and critical skills, but their responsibility as people who have been educated through taxpayers’ money is not going to go away. We will find ways of ensuring that they plough back to the NSFAS fund.”
She said it was hoped there would be more clarity on the graduate tax by the time Finance Minister Malusi Gigaba presented his budget in February.
Mkhize said she would — with cabinet approval — look into converting grants into loans if the student beneficiary was made to repeat an entire year. The money would then have to be repaid.
She said the billions of rands already owed by former students to the NSFAS would not be written off.
“We will be working with the South African Revenue Service, carefully looking at the status of those we can target. We cannot have people who are holding senior positions in the private sector or government who still owe NSFAS and joke about it.”
Higher Education Director-General Gwebinkundla Qonde confirmed that it would cost the government R12.4-billion next year to implement the plan.
He said that numbers were crunched and a determination was made by the department, in consultation with the National Treasury and the Department of Planning, Monitoring and Evaluation, that South Africa would be able to afford free university education “by reprioritising certain programmes”.
He said the government “is not going to borrow new money to finance it”.
Ahmed Bawa, CEO of Universities South Africa, the mouthpiece of the vicechancellors of the country’s 26 universities, said it was hoped that sufficient work was done at the Treasury to ensure that the provision of free higher education was sustainable.