COSATU calls for the scrapping of VAT and PIT hikes in the new Budget

NOW that Parliament has adopted the Budget it must honour its promise to scrap the value-added tax (VAT) and personal income tax (PIT) hikes, lest none will doubt the Budget’s passing was less than elegant, should not miss the important gains painstakingly won by Cosatu and other progressive voices, including inside the ANC-led government and Parliament.

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Government has heeded opposition from the Federation and others that the proposed 2% VAT hike present burden that million workingand middle-class families could not afford whether they are already battling to cope with the cost-of-living crisis.

Whilst Cosatu has opposed any VAT hike or not, adjusting PIT brackets 4% inflation gives workers already meagre wages, we are pleased Treasury has shifted from its historical default of blocklisting criticism of its budgetary proposals and swallow engagement on alternatives.

Cosatu is submitted to government and Parliament a variety of revenue and expenditure options that can generate public services and stimulate economic growth without inflicting pain on the working class.

We are pleased government has embraced our call to provide SARS an additional R4 billion to tackle R800bn in outstanding taxes. This we hope will improve tax collection by 1% to 2%, generating an additional R20 to R40bn annually.

In the midst of the parliamentary thorough, a key progressive call has been lost sight of. The Minister for Finance has asked for support for government to exit the unmerited Budget cuts that have crippled public services and the economy depend upon.

This is a fundamental shift that needs to be supported if we are to rebuild front-line services and stimulate the growth required to create jobs, whilst providing relief for the poor and unemployed. This is a call Cosatu and the left have made for years.