VAT hike inevitable, but the causes not

Finance Minister Malusi Gigaba delivering the budget speech in Cape Town. Picture: Jacques Nelles

Corruption, maladministration and inefficiency in the ANC-led government have siphoned off bucketloads of taxpayer money.

The last time Valued Added Tax (VAT) was increased was in 1993 … and the row which erupted threatened to disrupt the fragile negotiations to end apartheid.

The ANC and its unionist allies fought the National Party tooth and nail because they realised the tax would affect their people, the poorer section of society, the most.

So, it is ironic that a generation – 25 years – later, that it is that same organisation, the ANC, which has raised VAT to the new level of 15%.

Welcome to the real world, comrades … The unions are outraged and plan to embark on strikes and protest actions if the decision is not reversed.

That would probably hit their members doubly hard, because they will lose wages and lose the fight.

The increase in VAT was, frankly, inevitable. But the circumstances which made it so were not.

Corruption, maladministration and inefficiency in the ANC-led government, but particularly in the last 10 years, have siphoned off bucketloads of taxpayer money and left new President Cyril Ramaphosa and his bean counters no option but to raise taxes to recoup those losses.

If the unions want to prevent further such hikes in future, then they must move from being lapdogs to becoming watchdogs.

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today in print

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