Thousands complain about VAT

South Africans sign petitions calling for scrapping of increased tax rate

ALMOST 40 000 people have signed a petition to get Parliament to scrap the VAT increase.

The petition on advocacy organisation’s Amandla.mobi’s website rejects Finance Minister Malusi Gigaba’s 1 percentage point VAT increase.

The petition is endorsed by 36 civil society organisations which believe there are other ways of raising revenue rather than increasing VAT, which would “hit the poorest the hardest”.

It suggests, among others, increasing personal income tax on high-income earners, raising corporate tax and implementing a carbon tax.

“All of this should make it possible to relieve the burden on the poor, and get rid of regressive tax policies in opposition to mainstream economists who are calling for VAT increases.”

Regarding claims that this increase will not impact the poor as there are 19 basic food items that are zero-rated, the petition states there are other necessary items that would be subjected to the VAT increase.

“People cannot survive on only 19 types of food and also need school uniforms, sanitary pads, toiletries and many other things that are not VAT exempt.

“What is more, the government could instead redouble efforts to crack down on some ultra-rich South Africans and companies who are avoiding paying tax. We all have to pay our fair share.”

The civil society organisations, which endorsed the petition, have also made submissions as per the call for public comment on the Fiscal Framework and Revenue Proposals, tabled together with the Budget last week.

The petition also calls for an extension to today’s deadline for written submissions.

“What many of us don’t know is that we the public have a right to give input into the proposed VAT increase and we can force members of Parlia- ment to hear our voices and reject it. Three working days’ notice is nowhere near enough time for public comment,” the petition states.

Meanwhile, the DA has also started a petition, which has grown quickly and garnered almost 30 000 signatures.

The VAT increase from 14% to 15% is expected to add about R22.9 billion to the fiscus.

Thami Bolani, chairperson of the National Consumer Forum (NCF), said the increase was not fair on consumers.

“We are where we are because of a government which is bloated, poor service delivery, corruption, and money lost to state capture.

“We are where we are simply because the finances of the country are not properly managed,” he said.

While Bolani does not believe petitioning and public comments would make Parliament vote against the increase, he said an active citizenry was very important.

“What we need is for all South Africans to be more active so that these things don’t continue unchecked.

“If this is not addressed, we might find ourselves having to pay even more in future,” said Bolani.

Willie Coetzee, a tax law specialist and partner at law firm Shepstone and Wylie, said it was highly unlikely the decision would be reversed.

But, explaining the process, he said legislation allowed for Parliament to vote to set aside the decision to increase VAT.

The vote is expected to take place soon.

Coetzee said there was a huge financial shortfall that needed to be addressed.

“It’s unfortunate that it does affect the poor. But I don’t think we have any other choice, with the country in such a poor financial state. It’s the only way to bridge the financial shortfall quickly and, quite frankly, looking at comparable countries, 15% is about the going rate,” he said.

DA LEADER Mmusi Maimane has vowed to fight against the increase in value added tax because he believes it’s very bad news for poor people.

Maimane criticised the government’s VAT hike from 14% to 15% during the launch of the DA-initiated national petition in Soshanguve on Saturday.

The 1 percentage point increase was announced by Finance Minister Malusi Gigaba during his Budget speech in Parliament. It is the first VAT change since the tax was promulgated in 1993.

“It is undoubtedly one of the most anti-poor budgets we have ever seen – and it amounts to an assault on the poor and the jobless,” Maimane said.

He accused the ANC of cutting spending on services to poor people instead of “cutting the fat and waste in government – unnecessary expenditure and bloated departments”.

“The raising of VAT by 1 percentage point in effect means we will all be paying 7.14% more tax on everyday goods and services. This, combined with significant fuel levy increases, will make food and transport more expensive.

“It will now be more expensive to be unemployed in South Africa. Life will get harder for the most vulnerable in society over the coming months,” Maimane said.

He said raising VAT and transport levies would hit the poor and the jobless the hardest. “This is because poor households spend a much greater portion of their income than others on food and transport.”

He added it was unfair for the ANC to “steal from the public purse” and expect people to pay for it.

“South Africans are law abiding. We pay our taxes faithfully and deserve better than this. We will not take this lying down. Therefore, we are here today to call on all South Africans to join the fight against increased taxes for the poor and working class. The DA will oppose and fight the VAT increase and the transport levy increases on all fronts.”

Maimane said the DA would always prioritise fighting for the most vulnerable, such as the poor and unemployed.

“We will always stand up to the interests of a few for the benefit of many – whether it be big government, big business or big labour. And this Budget is precisely that. It is big government bullying ordinary South Africans into paying for its misdeeds. The ANC cannot make the poor pay for their looting of public money.”

To intensify the campaign against the VAT increase, the DA would table the petition in Parliament. It would also oppose the passing of the bill to give effect to the VAT increase from April 1, 2018, he said.

“We call on all MPs to vote against the laws that will give effect to these taxes, which will come before Parliament in the coming weeks. This includes the ANC’s alliance partners in Parliament. They cannot say they are against VAT increases in the media but vote to support the increase in Parliament,” Maimane said.

The DA will champion for the most vulnerable