SACP warns finance minister against hiking taxes impacting the poor

Finance Minister Enoch Godongwana, right, is set to deliver his first Budget Speech on Wednesday. In this file photo taken in November 2021, President Cyril Ramaphosa shares a joke with Godongwana. File Picture: Phando Jikelo/African News Agency (ANA)

Finance Minister Enoch Godongwana, right, is set to deliver his first Budget Speech on Wednesday. In this file photo taken in November 2021, President Cyril Ramaphosa shares a joke with Godongwana. File Picture: Phando Jikelo/African News Agency (ANA)

Published Feb 20, 2022

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Johannesburg – The SA Communist Party (SACP) has warned Finance Minister Enoch Godongwana that reducing taxes for the rich, and increasing them for the poor is unsustainable.

THE SACP retort came ahead of Godongwana’s Maiden Budget Speech on Wednesday.

The ANC’s ally, said in a country “characterised by crisis-high levels of inequality, it makes sense to assert a more progressive taxation framework for redistribution and to support transformation and development”.

”The neo-liberal trajectory of reducing tax for the rich and increasing the tax that affects the working-class and poor is unsustainable,” the party said.

The SACP outlined its expectations for Godongwana, who replaced Tito Mboweni as the finance minister in August, 2021.

“The SACP expects Godongwana to allocate funds to put into practice the extension of the social relief of distress grant, in line with the announcement made by President Cyril Ramaphosa during his State of the Nation Address on Thursday, February 11, 2022,” reads its statement.

Ramaphosa announced that the government is extending the provision of the R350 grant for a year, until the end of March 2023.

According to the SACP, the extension of the R350 grant does not cover all the aspects of its social policy call, and urged the government to commit to retaining the grant and adjusting it incrementally in a gradual process towards converting it into a universal basic income grant for unemployed South Africans.

The party also called on Godongwana to review Ramaphosa’s youth employment service.

“The incentive basically involved subsidising up to 50% of the wages of new workers between the ages of 18 and 29, who are paid wages below R6 000 per month… The continuing crisis-high youth unemployment suggests a major failure in the idea,” the SACP said.

The organisation also cautioned against using the National Treasury as a vehicle for importing, domesticating and implementing what it calls the “neo-liberal agenda driven by the Washington-based International Monetary Fund, the World Bank, and the Paris-based Organisation for Economic Co-operation and Development”.

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