COMMUNITY organisation, amandla.mobi, is disappointed and concerned that Finance Minister Enoch Godongwana has continued with his aggressive move to ‘increase the VAT rate by half-a-percentage point in 2025/26, and by another half-a-percentage point in the following year’.
Lessons from the past show that increasing the VAT is not an effective solution to raising enough revenue, as the minister claims.
The National Treasury failed to raise the targeted revenue when it increased the VAT in 2018.
Increasing the VAT will hurt the marginalised majority more than it would benefit them and nullify social grant increases. The decision to go ahead with the VAT increase tells how little regard the minister holds for the marginalised majority.
amandla.mobi is also concerned that the Minister continues to protect the greedy rich by refusing to increase the Corporate Income Tax and implementing a wealth tax. Instead, he has defended his decision to increase the VAT by scapegoating the R370 SRD Grant and workers, when other feasible alternatives to raise revenue for the much-needed interventions exist.
“Minister Godongwana could have easily opted for other alternatives, such as increasing taxes for high net-worth individuals, increasing the corporate income tax, urgently implementing a wealth tax, and scrapping tax breaks for the super-rich.
The SRD grant is not a burdensome expenditure but a lifeline for millions who cannot afford to support themselves. Attacking the grant as the reason for a VAT increase is an atrocious move that will have dire consequences for the marginalised majority,” says Tlou Seopa, amandla.mobi Senior Campaigner.
The 2025 budget was a missed opportunity to present the nation with a people’s budget.
amandla.mobi calls on President Cyril Ramaphosa, the Government of National Unity and the Parliament Committees on Finance and Appropriations to actually turn the tide on poverty and inequality, which is only made possible by increasing taxes on the super-rich.
Image supplied (Finance Minister Enoch Godongwana, has continued with his aggressive move to increase the VAT rate by half-a-percentage point in 2025/26, and by another half-a-percentage point in the following year).
