Searching for VAT survivors after a bumpy ride for small businesses
he real victims, township businesses and family-run businesses, are left wondering if it is going to rain cats and dogs or bring clear blue skies for VAT season.
Image: Ziphozonke Lushaba / Independent Newspapers
South Africa's 'VAT desert storm' may have ended, at least for now, after witnessing political theatrics and policy paralysis, that attempted to bring snow to a desert while bidding to solve the dry revenue generation period.
It almost displayed itself through a public gallery with all the makings of a political thriller—multiple plot twists, frantic coalition bartering, and a final 'U-turn of the century'—yet the real victims, township businesses and family-run businesses, are left wondering if it is going to rain cats and dogs or bring clear blue skies for VAT season.
While the ANC, DA and EFF spar over 'fiscal sustainability' versus 'taxing the rich,' township spaza shops, clothing retailers and small cafés were caught in the crossfire.
When President Cyril Ramaphosa attempted to patch his dripping VAT shack, suddenly, the Cape wind blowing from the DA's finance spokesperson Dr. Mark Burke, blasted the VAT proposal as an outdated ideology that has long sunk its head under Soviet beach sand. I trust that you will be able to connect the dots between ANC and Soviet beaches, if not, ask the zero pusillanimous 'Mbaks.'
The EFF's Julius Malema, for his RED part, wanted nothing but 'kill the rich, spare the poor' demanding an increased tax on wealthy people who can afford to buy few buffalos without breaking a couch.
Behind the not-so-closed doors, coalition talks teetered on collapse, with the DA taking its Government of National Unity (GNU) to court, only to later reconcile out of court. And just like that, every political butterfly came out of the cocoon proclaiming a colourful victory for taxpayers.
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Advertisement
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Next
Stay
Close ✕
Yet, throughout this VAT expropriation spectacle, the real refugees were not the forty-nine (49) Afrikaaners, but rather South African small businesses, caught in the political pickpocketing without compensation.
Some small companies spent weeks and vast sums of money updating their accounting software—only to end up starring in the ultimate 'behind-the-scenes' blooper reel of tax season.
Even Uncle SARS—the tax collector small businesses love to vilify—finally grudgingly admitted that its VAT flip-flop has real-world fallout for vendors.
The Commissioner conceded that SMMEs sank significant resources to cater for a rate hike that tried a moonwalk on the floor full of political potholes, as a result of an ambiguous parliamentary ping-pong VAT policy.
Although SARS promises to make VAT ride less bumpy, for many township traders and family-run businesses, the bigger question remains: who will foot the bill for this tax-led whiplash?
The naked truth is: the storm hasn't fully passed—there's still thunder rolling in the distance.
The Finance Minister, Enoch Godongwana, is gearing up to re-table the 2025 National Budget on 21 May, for the third time this year and small businesses are bracing for yet another policy adventurous stint on planet Uranus.
Budget 3.0 might promise fresh forecasts, potential spending cuts, and no mention of the ghost VAT hike, but the crystal ball warns SMMEs to hold tight, as a single day in the South African political dynasty is dangerously long.
It has an inherent tendency to catch people flying by the seat of their pants, like Comrade Rasool's sudden departure from the now-famous refugee camp.
While big corporates may survive a little fiscal drama, SMMEs are left asking if more belt-tightening, new levies, or actual relief is on the horizon.
As the dust settles on South Africa's VAT Dakar Rally, the true survivors—township tuck shops, small businesses, and emerging agro-processors are those that have weathered the U-turns, re-priced their goods, and navigated SARS' labyrinthine communications with grit and resilience.
The endurance of these businesses through political brinkmanship reveals a hard truth: each VAT debate risks becoming a road spike, not a revenue booster.
As policymakers prepare for Budget 3.0, they must remember that SMMEs are not just line items, they're the backbone of job creation and community stability.
True survivors will be those spared from policy ping-pong, supported instead by clear and consistent VAT frameworks that empower rather than penalise the very businesses we rely on to drive South Africa's economic revival.
Bongani Ntombela.
Image: Supplied.
Bongani Ntombela, executive: programmes at 22 On Sloane.
BUSINESS REPORT
Visit: www.businessreport.co.za
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Citizen
16 minutes ago
- The Citizen
NPA failures need more scrutiny
The NPA's inability to jail state capture suspects like Moroadi Cholota continues to erode public confidence. The National Prosecuting Authority (NPA) considers that it was unlucky in the ruling handed down by the Free State High Court in Bloemfontein which allowed one of former Free State premier Ace Magashule's corruption co-accused to walk free. NPA national spokesperson Mthunzi Mhaga said the organisation was 'taken aback by the judgment' because the NPA believed Moroadi Cholota and her lawyers were effectively appealing the United States judgment which permitted her extradition from there. Clearly, he missed Bloemfontein judge Philip Loubser stating 'it is undeniable that the state presented false and incorrect information to United States authorities', information upon which those authorities acted in good faith and deported Cholota. Without getting into the legal minutiae, this is clearly another example where the NPA has failed to progress a case against a high-profile state capture accused. It has now been eight years since the release of the 'Gupta Leaks' information which fingered a host of ANC-connected individuals in state capture. ALSO READ: NPA 'taken aback' over Moroadi Cholota extradition ruling, hints at appeal In that time, the NPA has failed in a number of attempts to finalise successful prosecutions, including those involving the Estina Dairy, former Eskom executive Matshela Koko, ANC politician Zizi Kodwa and the extradition of the Gupta brothers from the United Arab Emirates to stand trial in South Africa. It's an often-aired, but manifestly true, complaint from the public that, despite the massive coverage of apparently well-sourced allegations in the media about state capture, no politician or business person has ended up behind bars wearing an orange prison uniform. There are three possible reasons for that. First, all these good citizens are innocent and it has been a plot by white monopoly capital-bought media. Second, the level of incompetence within the NPA beggars belief. Finally, the NPA is being 'persuaded' – one way or another – to not do its job properly. You decide which one is most likely… NOW READ: NPA lacking in lottery probe
The Citizen
37 minutes ago
- The Citizen
Cosatu says debate on B-BBEE is needed for beneciaries' benefit
Cosatu calls for reform of B-BBEE to ensure real empowerment for workers and disadvantaged communities, not just political elites and business insiders. The debate about the broad-based black economic empowerment (B-BBEE) is needed on how to ensure it benefits the beneficiaries. This is according to union federation Cosatu spokesperson Matthew Parks, who was reacting to the ongoing debate on whether the B-BBEE policy is aimed at being biased against whites. Inequality persists 'While we support the B-BBEE Act, we believe a debate is needed on how to make sure it reaches its intended beneficiaries, in particular historically disadvantaged individuals and communities,' he said. 'We support the objectives of B-BBEE. These are necessary given three and a half centuries of systematic discrimination and disempowerment under colonial and apartheid rule. South Africa is 31 years into democracy but remains the world's most unequal society.' Parks said the policy was a necessity to help historically disadvantaged persons and communities to enter the economy, not only as wage earners but also as owners of businesses. He said Cosatu cannot remain satisfied with progress when the colour of one's skin still largely determines one's economic status. ALSO READ: Minister extends date for comments on R100 billion transformation fund 'Ticking time bomb' He added the majority of shares on the Johannesburg Stock Exchange are owned by whites, similarly with regards to ownership patterns of businesses. 'This is a ticking time bomb that we must address. It's not racism against whites and, in fact, white women and white South Africans with disabilities are included. White South Africans and investors are not excluded,' he said. 'All the policy seeks to do is to boost the economic empowerment of those still disadvantaged. It has helped to begin the journey of building a nonracial society. While some progress has been made in building a black middle class and black industrialists, it is not enough given the inequalities still so prevalent.' Parks said more must be done to ensure 'it benefits workers and not just the elite and worker ownership and employee shareholder ownership programmes should be ramped up'. He added more must be done to ensure investors honour their B-BBEE shareholders and equity equivalents. Equity equivalents offer alternative for foreign investors When asked if Cosatu supports the equity equivalents, Parks agreed and said that has been one of two options under the B-BBEE Act for many years. He said they provide a useful option for international investors who are not able to do the B-BBEE shareholders' option. ALSO READ: DA transformation policies stance dents its image and may lose it votes, says expert 'Equity equivalent option allows investors to support local manufacturers, create jobs, skill workers or invest in local communities,' he said. 'These have benefited many local businesses, workers and communities. They have been successful in many sectors, including clothing and motor manufacturing. Many companies have utilised this option before.' Malatsi's draft policy Communications and Digital Technologies Minister Solly Malatsi was recently criticised for unveiling a draft policy direction in the Government Gazette 'proposing an alternative to the B-BBEE ownership requirements for the ICT [Information and Communication Technology] sector'. 'The new model would allow companies to meet empowerment obligations through equity equivalent programmes rather than direct ownership transfers,' one critic said. The proposed amendment to the Act could facilitate the entry of investors such as Elon Musk's Starlink into South Africa's telecommunications market and contribute to the empowerment of the previously disadvantaged people without having done a direct transfer of ownership. Malatsi's critics said he was trying to pave a way for Starlink to do business in SA. Musk has previously criticised the B-BBEE policy, saying it was racist. NOW READ: Proposed Starlink deal 'wrong in principle and practice'
IOL News
an hour ago
- IOL News
Fuel levy increase confirmed as EFF's urgent application is dismissed
The EFF launches an urgent application to interdict the 4% fuel levy increase. at the Western Cape High Court. Image: Ian Landsberg/Independent Newspapers The 4% fuel levy increase is set to take effect on Wednesday after the Western Cape High Court dismissed the EFF's urgent application to interdict the fuel levy increase. The EFF had filed a Notice of Motion, challenging the Minister of Finance Enoch Godongwana's decision to increase the general fuel levy. They sought to have the application heard as an urgent matter, dispensing with the usual requirements for forms and service on Tuesday. The party through Advocate Mfesane Ka-Siboto had argued that the increase would unfairly burden the working class and poor, worsening inequality and violating constitutional rights. He said the minister's decision lacked both rationality and parliamentary oversight. Ka-Siboto further told the court, in accordance with the Money Bills Amendment Procedure and Related Matters Act, only a law could serve as the proper instrument for the minister to impose a tax. The EFF claimed that Godongwana overstepped his powers by announcing the fuel levy increase in his Budget speech, without parliamentary approval. "What is clear is that the minister is imposing tax," Ka-Siboto said, citing the Money Bills Amendment Procedure and Related Matters Act as the legal framework Godongwana should have followed. The EFF also argued that the fuel levy increase is both economically unjust and unconstitutional, deepening inequality and undermining access to essential goods and services. EFF National chairperson Noluthando Molutshungu and Convernor of deployees to the Western Cape Rebecca Mohlala at the Western Cape High court on Tuesday to challenge the fuel levy increase. Image: Ian Landsberg "It deepens inequality and undermines access to essential goods and services. We are committed to fighting the fuel levy increase in court and in parliament," the party said. However, Treasury senior counsel, Advocate Kameel Premhid, argued that the fuel levy increase is not a tax but rather a regulation change. Premhid maintained that the minister has always had the power to adjust fuel levies as part of the budgetary process. Premhid told the court that the increase is not a tax but a regulation. "Regulatory charges bring in money, so they might raise revenue. But that doesn't make it a tax, and just because a tax also raises revenue, the two are not the same thing." The Western Cape High Court's dismissal of the EFF's bid means the fuel levy increase will go ahead as planned. The increase will see diesel prices rise by 15 cents per litre and gasoline by 16 cents per litre. The EFF may still pursue its challenge to the fuel levy increase in Part B of its application, which seeks to review and set aside Godongwana's decision. EFF National chairperson, Noluthando Nolutshungu, said the fuel levy increase is expected to have significant economic consequences, particularly for low-income households and businesses already struggling with high living costs. She warned that the increase would place an "unjust burden" on the working class and the poor, who are already reeling from rising living costs, stagnant wages, and ongoing economic hardship. The party has vowed to continue challenging the decision in court and in Parliament. Despite the setback, the party says it remains committed to fighting for the rights of the poor and working class, who they believe will be disproportionately affected by the hike. The EFF argues that the increase is unlawful. Reacting to the dismissal, EFF Treasurer General Omphile Maotwe said the party approached the courts in defence of the poor and working class. "The party will study the judgment and consider further legal action. Additionally, the EFF plans to introduce amendments to relevant legislation to prevent the National Treasury from imposing taxation without parliamentary approval," Maotwe said.
