By Thapelo Molefe
The SA Communist Party (SACP) has issued a warning ahead of the 2025 Budget Speech, declaring that any increase in Value-Added Tax will be met with militant resistance.
“For households living on the pittance afforded by low wages or social grants, every VAT increase strips away what little purchasing power they possess,” the party said on Monday.
Instead of increasing VAT, the government should focus on progressive taxation targeting the wealthy to fund essential public services, it said.
It reaffirmed its commitment to “mass mobilisation of the working class against regressive fiscal policies” and warned that using the Social Relief of Distress Grant as justification for a VAT increase was “unfathomable”.
“The unemployed, both those actively seeking work and those discouraged after years of looking for work without success, must not be used as VAT-increase footballs.”
Similarly, the Federation of Unions of SA (Fedusa) has called for bold fiscal policies to alleviate the growing financial burden on workers and the unemployed.
As tensions rise, both organisations have taken a firm stand against austerity, demanding progressive measures that prioritise economic growth, job security and social justice.
Their urgent calls come at a time when the country faces soaring living costs, failing public institutions and high rates of unemployment.
The SACP said that a VAT hike would violate commitments made in the ANC’s May 2024 election manifesto to address the cost of living crisis.
“The May 2024 election manifesto that we, as alliance partners endorsed, commits the government to tackling the cost of living crisis by prioritising food security, including through VAT exemption on essential items – not increasing VAT,” the party stated.
It said that budget cuts have negatively impacted critical social programmes and economic growth.
Instead of austerity measures, the party called for an alternative economic approach focused on state-led investment in industrialisation and job creation.
“An effective recovery programme, particularly one targeting greater inclusivity and cutting unemployment and poverty, would generate more resources for the fiscus. This, rather than austerity, should be the preferred route to fiscal sustainability.”
Additionally, the SACP criticised the increasing role of private capital in state affairs, arguing that “a government that defers its solutions to unelected private capital betrays the very people it is meant to serve”.
Meanwhile, Fedusa, which represents 617,000 workers across diverse sectors, has emphasised the need for expansionary fiscal policies, including increased public investment in infrastructure, restoring funding to key public institutions and expanding industrial development initiatives.
The federation also raised concerns over global economic instability and its impact on South Africa, urging the government to strengthen trade policies, diversify export markets and establish financial relief mechanisms for workers and businesses affected by international disruptions.
Fedusa has further called for urgent action on energy and transport costs, the revival of state-owned enterprises and the introduction of a universal Basic Income Grant to support the unemployed.
Looking ahead to Finance Minister Enoch Godongwana’s Budget Speech on Wednesday, both organisations have made it clear that they will not accept regressive economic measures.
“The SACP stands ready to take militant action alongside all progressive forces to roll back any regressive measures imposed on the working class, and we call on all workers and poor communities to unite in the fight for economic justice,” the party declared.
Fedusa echoed similar sentiments, stating: “The government must move beyond rhetoric and take decisive, measurable action to create a more equitable, prosperous and resilient South Africa.”
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