The African National Congress (ANC) says it is seriously considering the introduction of a Wealth Tax to try and recover the R20 billion in revenue shortfall. The party says it has reluctantly accepted an increase of Value Added Tax (VAT) by a percentage point due to the country’s precarious economic situation.
It made these comments during the debate on the country’s tax laws in Parliament on Tuesday. The ruling party suggested that an increase of VAT be reviewed after three years.
That is due to its negative impact on the poor and the working class.
It also suggested that the Treasury should also add the zero-rated food items, with the aim of cushioning the poor from VAT increases.
While opposition parties blamed corruption and mismanagement by the ANC government, the party shifted the blame from itself. “Forty eight percent of South Africa’s companies are dodging to pay tax that is why we have this revenue shortfall and we will be intrusive as Members of Parliament,” says ANC Member of Parliament Thandi Tobias.
However opposition parties put the blame for the country’s revenue shortfalls squarely on the ANC.
DA MP Gwen Ngwenya, EFF MP Mbuyiseni Ndlozi and IFP MP Mkhulekwa Hlengwa say all tax increases, including petrol hikes, VAT, and e-tolls are a product of the ANC’s mismanagement and corruption.
Opposition parties say the government’s fruitless and wasteful expenditure is further complicating an already dire economic situation. The Auditor General has been reporting fruitless and wasteful expenditure by government departments and state-owned entities, which amounted to billions of rands.
