CAPE TOWN – Ahead of the Budget, trade union federation Cosatu has argued against raising the VAT rate and increasing income tax rates for working and middle class South Africa. The will be the first budget under the Ramaphosa presidency and is set to be delivered in parliament on Wednesday afternoon.
In the past week, economists have been raising prospects that the finance minister with hike VAT rates to make up for a tax revenue shortfall and increased spending for fee free education for some tertiary students.
“Cosatu expects government not to throw the working and middle classes under the bus with VAT and income tax hikes,” said the trade union federation on Monday in its pre-Budget statement.
“Any increase in taxes on the poor will further condemn them to hunger and stifle economic growth. Government must remember workers are voters and they are tired.”
The federation further said the state should increase taxes on imported and luxury goods, and “the many millionaires who find sophisticated ways to avoid paying taxes”.
Cosatu also called on President Ramaphosa to cut the size of national and provincial cabinets, trim the perks of politician, as well as halt the provision of bodyguard to all mayors and municipal speakers.
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