Tax hikes are a slap in the face of hard-working South Africans
18 January 2021
The Democratic Alliance (DA) strongly opposes the tax hikes mooted by Treasury Director-General (DG), Dondo Mogajane, to pay for the Covid vaccine programme. Higher taxes would be a slap in the face of hard-working South Africans. The proposal is callous and shows an extraordinary insensitivity to the financial suffering of so many families right now.
The total cost of a comprehensive vaccine rollout is estimated at just over R15 billion at most. This amount would be comfortably affordable for the government, were it to reprioritise wasteful programmes and cancel wasteful bailouts. The admission that tax hikes must be considered now, is an admission that government did no forward planning for the vaccine rollout last year.
On Sunday, Mogajane was quoted as saying that the country would not take Treasury seriously should they not be able to find money for vaccines but were nevertheless able to find money to, yet again, bail out South African Airways.
The DA takes no pleasure in pointing out the obvious to the DG: The National Treasury, and the Executive branch in general, has lost public trust a long time ago, and will certainly not regain it by hiking taxes.
South Africans already have to bear a high tax burden with vanishingly little to show for it in the form of public service delivery.
In the context of an unprecedented economic crisis, Treasury’s suggestion of tax hikes is not only morally indefensible, but bad economic policy as well.
It is not the hard-working public’s fault that government has allowed South Africa’s fiscal problems to spiral out of control. Instead of punishing citizens even further, it would be best for Treasury to find the funds necessary for adequate vaccine procurement through reprioritisation of funds in terms of the Public Finance Management Act, starting with cancelling the SAA bailout.
Issued by Geordin Hill-Lewis, DA Shadow Minister of Finance, 18 January 2021