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Mashaba launches campaign opposing tax hike to fund Covid-19 vaccines

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Mashaba launches campaign opposing tax hike to fund Covid-19 vaccines

ActionSA leader Herman Mashaba

21st January 2021

By: News24Wire

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ActionSA leader Herman Mashaba has launched a public campaign to oppose a possible tax hike.

This comes after National Treasury Director-General Dondo Mogajane announced to the media that a tax hike was among its options to fund the Covid-19 vaccine.

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In an interview on Radio 702, Mogajane said Treasury was looking at various options, including reprioritising expenditure, loans and taxes.

"One way or the other, we have to bite the bullet. We will have to do it for the sake of South Africans and for the sake of saving lives."

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He added that, while the tax burden of the country was high, Treasury would ensure the tax hike was not detrimental to the economy.

"We have to do anything possible as per the president's instruction to make sure that we get these vaccines," he said.

In a statement on Thursday, Mashaba said the #CutTheFat campaign called on all South Africans to draw a line in the sand and say "this far and no further" to a government "that continues to spend and live expensively while South Africans are suffering".

Mashaba added that a government which raised taxes on any South African under the current economic conditions would have to prove that it had done everything in its power to reduce its own expenditure first.

"Instead, our government will proceed to deliver its budget in February, which will continue with its Cabinet of 62 ministers and deputy ministers along with their ministerial residences, staff compliments, VIP bodyguards and private security. This is just one example of so many that ActionSA will be exposing in the coming days and weeks," he added.

Speaking to Fin24, an economist said he did not foresee Treasury being too aggressive with tax hikes when Finance Minister Tito Mboweni delivers the budget speech in February.

Chief economist at the Bureau for Economic Research Hugo Pienaar told Fin24 that Treasury should reprioritise expenditure as a preferred option, rather than tax hikes.

"Countries around the world are reducing taxes to respond to the economic recessions brought about by this global pandemic. They do this to increase household budgets and increase economic activity which employs more people," Mashaba said.

He encouraged the public to support the campaign on the party website to pressure the government to cut its own expenditure so as to fund the vaccine rollout, before considering raising an additional cent in taxes.

"Our message to President [Cyril] Ramaphosa is to show leadership by example. While there are many budget cuts that have to be made, the President should start by showing us a new Cabinet that can fit into an average boardroom," he said.

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