EFF pushes its alternative budget

The party has proposed a R512.8bn revenue strategy and refuses to agree to a VAT increase

- Mandisa Nyathi

The Economic Freedom Fighters (EFF) used talks with the ANC last week to double down on its push for a radical shift in fiscal policy, again rejecting a proposed VAT hike and instead insisting the ANC table a R512.8 billion stimulus plan aimed at reversing austerity and accelerating inclusive economic growth.

The Red Berets met the ANC last Friday after being invited by the party to discuss the budget impasse and explore possible alignment on the fiscal framework passed by parliament earlier this month.

The EFF used the meeting to reiterate its opposition to the treasury's plan and instead presented its own counter-budget, which outlines a radically different path, centred on wealth taxes, public investment and structural reforms.

In an interview with the Mail & Guardian, EFF spokesperson Sinawo Thambo said the party outright rejected proposals to vote in favour of a 0.5% VAT increase, due to take effect on 1 May.

"This VAT hike is a regressive tax that punishes the poor to protect elite interests," said Thambo. "There are better ways to raise revenue than burdening the working class."

Instead, the EFF is calling for an increase in corporate income tax from 27% to 28.5% in 2025-26 and 30.5% in 2026-27.

The reversal of what the party calls the "ANC-era corporate tax cuts" of 2022 is expected to generate R44.7 billion in additional revenue, Thambo said.

The party proposes a three-year economic stimulus package, financed through progressive taxation and reallocated state resources.

It includes funding for job creation, infrastructure development, education and industrialisation, which the party argues would boost GDP growth to 4.5% between now and 2027 more than double the treasury's projection of 1.8%.