South African MP proposes ‘Apartheid tax' to shield poor from VAT hike
EFF Treasurer-General Omphile Maotwe has urged the government to introduce an 'apartheid tax' on inherited apartheid-era wealth instead of raising Value Added-Tax (VAT).
Speaking to journalists outside the Western Cape High Court on Tuesday—during the first hearing challenging the legality of the planned VAT hike—Maotwe argued that such a tax reform would not only generate significantly more revenue than the R28 billion shortfall the government seeks to address.
She said this would also ease growing tensions within the Government of National Unity (GNU) over fiscal policy.
She further criticised Finance Minister Enoch Godongwana for lacking the political will to impose taxes on the wealthy, suggesting that the Minister was 'afraid to approach the rich,' and instead opted for a VAT increase that disproportionately impacts the poor.
'That will give you far more money than the R 28 bn they're looking for. But the easy target is often the poor. We can't afford to put bread on the table. Imagine with the impact of the VAT increase.
'Our people will die from poverty. The triple oppression of poverty, inequality and unemployment is going to get worse,' she said.
The EFF and the DA requested the court to halt tax hikes, arguing that it will cripple the public's pockets. The court is yet to rule.
The hike is expected to come in on May 1.
In his defence, Finance Minister Godongwana emphasised the necessity of the VAT hike to sustain critical public services, including healthcare, education, transportation, and public safety.
Legal submissions from the Treasury argued that the VAT increase is the most viable and sustainable option given current fiscal constraints, limited borrowing capacity, and the risks associated with further budget cuts.
In contrast, Maotwe has advocated for a more progressive taxation approach.
She has called on the government to shift the fiscal burden onto high-net-worth individuals by introducing a wealth tax and closing loopholes that allow trusts and luxury properties to evade fair taxation.
'We are telling him he doesn't need to increase VAT. He needs to tax the rich. Introduce a wealth tax. Many trusts hold luxury properties which are not being taxed, but they use the portfolios to apply for loans at the banks,' she said.
She also proposed an increase in the corporate tax rate from the current 27% to 29%, citing strong profit margins in the private sector.First published by IOL
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