Gigaba 'robbed Peter to pay Paul' - say Vavi‚ Maimane
The ANC is punishing the poor for its mistakes of the last nine years by increasing Value Added Tax and personal income tax for low income earners.
That's the assertion of DA leader Mmusi Maimane following the tabling of the 2018/2019 national budget in Parliament by Finance Minister Malusi Gigaba.
Gigaba announced that VAT would be increased for the first time in 25 years from 14 to 15 percent with effect from April 1 this year while other taxes such as pay-as-you-earn tax for low-income earners and the fuel levy would also be on the rise in the new financial year.
Government was forced to scramble to find R57-billion to fund free tertiary education that was announced by former president Jacob Zuma in December last year with no costing done.
"What was clear is that he asked people today to pay for the errors of the last nine years. The ANC stole money now poor people are going to have to pay.
"They are going to have to pay for an increase in inflationary pressure‚ an increase in fuel costs which will mean higher transport costs for our people. They are going to have to pay for the fact that there are significant cuts in provinces and local governments‚ which means basic services like roads‚ piping water and infrastructure will be affected‚" said Maimane.
Zwelinzima Vavi‚ the general secretary of SAFTU‚ said with this year's tax increases‚ government was "robbing Peter to pay Paul".
"The VAT increase is such a double insult to workers…we're being insulted. This is pro-business budget‚ it's anti poor‚ It's been a cherry on top to punish them‚ to rob them as the Paul in order to pay Peter the student‚ who have been out in the streets demanding free education.
"It's no movement forward because all it will do is to increase the gap between the rich and the poor."
But ANC national chairperson‚ Gwede Mantashe said Gigaba had "done‚ what is right in the circumstances".
"The fact that it is done (VAT increase) for first time in many years‚ means that government is resilient in protecting the poor. Even with one percent increase‚ it has maintained zero rating on basic foodstuffs and that's for the poor.
"Actually it’s the elites who are complaining about hitting the poor because VAT will hit luxury goods. And you'll see that customs excise for luxury goods has been increased‚ therefore it's a progressive tax system‚" said Mantashe.