Poor will be hardest hit by tax hike, insists Mbhazima Shilowa

Former Cosatu general secretary Mbhazima Shilowa has entered the fray to lambast the VAT increase, saying even the Mandela/Mbeki neoliberal administrations refused to hike the tax as it would hit the poor hardest.

“Even the class of 1996 never increased VAT because they knew of its impact on the poor. The poor are not only those who receive social grants but working people who rely on basic foodstuffs for survival, looking after large families,” Shilowa said.

In a tweet responding to Shilowa, ANC NEC member Tony Yengeni said the reason the ANC government refused to increase VAT since assuming power in 1994 was because they recognised that VAT was taxing the poor, and that was fact.

Shilowa questioned the wisdom of Finance Minister Malusi Gigaba’s VAT pronouncement.

“I tell people the minister said it won’t impact on them. (But) they ask if paraffin and fish will not rise,” Shilowa said.

Shilowa succeeded Jay Naidoo as Cosatu general secretary. Naidoo led a successful campaign against VAT and insisted on the exclusion of basic foodstuff from the tax in the 1990s.

The anti-VAT stance has been supported by Shilowa and his successor, Zwelinzima Vavi.

Ironically, Cosatu has not issued its customary post-budget statement.

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