Democratic Alliance (DA) leader Mmusi Maimane on Tuesday led a march to the National Treasury offices in Pretoria to reject high value-added tax (VAT) rates.
Former Finance Minister Malusi Gigaba tabled his maiden Budget Speech last month and announced a VAT increase for the first time in over two decades.
Speaking at the march, Maimane said the DA rejected government’s plans to “make up for their waste and their greed” by taxing the poor even further.
The DA said it opposed any solution that placed the burden on the poor, who could not afford the basics, to pay even more to keep looking after “loyal cadres”. It called on government to reverse the 1 percentage point VAT increase and to cut waste in government, which it says will raise an additional R112-billion.
“Because that’s exactly what this VAT increase, along with the 52 cents per litre hike in the fuel levy, will do. It will target the people who spend by far the biggest part of their income on food and transport,” Maimane said.
Handing over a memorandum to Treasury, the DA presented an alternative to balance the deficit.
The Opposition party pointed out that South Africa’s Cabinet could be cut down to 15 ministries and foreign missions could be reduced by 69, saving the country about R18-billion.
“These cuts to service delivery, and the VAT increase of one percentage point will make life harder for the millions of South Africans who face a daily battle to put food on the table. This increase will force poor South Africans to pay more for basic goods, services and transport. In short, it is an assault on the poor,” stated the DA.
By implementing a one-year wage freeze for public service office bearers, including local and general government employees, and by forgoing performance bonuses in government, the country can save over R60-billion, argued Maimane.
A further R17-billion can be saved over the medium term by withdrawing from the New Development Bank, he added.
DA Shadow Deputy Minister of Finance Alf Lees had already committed to forwarding the DA’s proposals to Finance Minister Nhlanhla Nene, in the genuine hope that the draft Rates and Monetary Amounts Bill will be withdrawn and amended to remove all tax increases.
The DA asserted that through bold expenditure cuts, a comprehensive expenditure review and the sale of assets, the necessary savings can be made to protect ordinary South Africans from further grinding poverty.