COSATU statement on the VAT Panel Report 

13 August 2018

COSATU notes and welcomes the VAT Panel Report and the federation will be making a further submission on the VAT hike and other ways to alleviate its dire impact upon workers and their families to the Finance Minister.

The federation is disappointed but not surprised that the Panel did not call upon government to rescind its VAT hike.  COSATU maintains that the VAT hike was a slap in the face for the poor.  It was tantamount to dumping the bill for looting by politicians, their families and friends to the poor. The real solution to the budgetary crisis is simply to stop the looting and wastage and recover our stolen taxpayers’ monies. 

We applaud and support its proposals to remove VAT from key food products, sanitary and school uniforms.  This will provide welcome relief for the poor households.  These are basic necessities for working class families, women and girls and learners.  Government must act upon these recommendations and implement them without further delay. 

However government will need to explain how it will ensure that any VAT exemptions will translate into price cuts for those products.  If not then we face the risk that retailers will simply pocket the VAT exemptions and the poor will be ripped off once again.

COSATU urges government to have the political courage to go further than the VAT Panel recommendations. It must provide free domestically produced sanitary pads to all no fee schools, tertiary institutions, clinics, hospitals and any other accessible venues to ensure that all poor women and girls have access to free sanitary pads.  The dignity of women and girls must be protected.  They must be supported to be fully participating learners, students and workers and not held back by not being able to afford sanitary pads. 

Government must assist poor families with the ever rising costs of school supplies e.g. stationery, text books and uniforms.  Government must provide these to all no fee schools and to indigent learners at other schools and institutions of learning.  Let us make the Freedom Charter a living reality and ensure that the doors of learning are really open for all!

Government must introduce a progressive sliding VAT rates for water and electricity for the poor, working class and social grant recipients.  This should ensure that the poor receive sufficient water and electricity VAT free. 

Lastly government must introduce a luxury VAT rate on luxury goods and increase corporate tax.  This alone would generate more than R20 billion in revenue for government and could be used to fund job creation programmes.

Issued by Matthew Parks, Parliamentary Coordinator, COSATU, 13 August 2018