The poor won’t fill the pinch of the Vat hike for free education

The Midrand Local Economic Empowerment Forum has welcomed Minister Malusi Gigaba’s budget speech citing that the increase in Vat (Value Added Tax) for the fee-free education would not necessarily affect the price of rice for the poor.

Gigaba delivered his budget speech on 22 February revealing that one per cent of the Vat increase would address fee-free education in the country. This follows after former President Jacob Zuma announced that government would subsidise free higher education for poor and working-class students in December last year. For this cause, an amount of R57 billion has been allocated in the medium-term budget.

Executive committee member of the forum Benson Motsumi said they were fully aware that the budget was tight due to a stagnant economy the past few years as a result of the persistent global rescission. ” We welcome the Vat increase which is intended to address free education for the poor. We also welcome the fact that the poor are largely shielded from paying Vat. It must be understood that foodstuff such as maize, rice and bread which are mainly consumed by the poor are Vat free.”

He added that the Vat increase would only apply to luxury goods.

Motsumi said that the minister had to make tough decisions in order to deal with a revenue shortfall. “We welcome the announcement of some relief for the poor and the working class in the form of a below-inflation increase in personal income tax while ensuring an above average increase in social grants.”

He said vulnerable households are shielded from Vat increase. “Vulnerable households will also be compensated through an above average increase in social grants. We are also happy that some relief will be provided for lower income individuals through an increase in the bottom three personal income tax brackets and the rebates.”

Meanwhile, the Equal Education organisation said that the desperately-needed investment in higher education was at the expense of the basic education system. Head of policy and training at Equal Education Leanne Jansen-Thomas said the need of poor, black students has been pit against that of poor, black learners.

“Equal Education has been a staunch supporter of the call for fee-free higher education, with the poorest being prioritised. This while continuing the many struggles for quality and equal education in our primary schools and high schools. For very many learners, fees are not the only or primary barrier to higher education – poor quality primary schooling is,

she said.

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