SOUTH Africa’s National Treasury is considering raising taxes as one of several possible mechanisms to fund the vaccination drive against Covid-19, Business Day reported.
The government viewed the vaccines as a public good and was committed to financing their rollout, with or without support from the private sector and medical schemes, the Johannesburg-based newspaper reported, citing Treasury director-general Dondo Mogajane.
Other options the Treasury is exploring include widening the budget deficit and reprioritizing government spending. The pandemic was a good case for emergency funding, Business Day cited Mogajane as saying.
The department of health has estimated a maximum cost of R20 billion ($1.3 billion) to vaccinate the entire country, while more recent internal estimates done by the Treasury are far lower than this, the newspaper said.
The government has been criticized by South African scientists for the slow pace of its vaccine procurement.
Details about discussions with vaccine manufacturers were only released this month, and a charity had to pay the deposit for South Africa to join the Covax program.
President Cyril Ramaphosa said the country will get an initial 20 million doses, with the first batch of 1.5 million shots of the vaccine developed by AstraZeneca Plc likely to arrive this month.
The country’s official opposition party, the Democratic Alliance (DA), has slammed the tax hikes by Treasury, saying higher taxes would be a slap in the face of hard-working South Africans.
“The proposal is callous and shows an extraordinary insensitivity to the financial suffering of so many families right now,” said Geordin Hill-Lewis, the party’s Shadow Minister of Finance.
Hill-Lewis said the total cost of a comprehensive vaccine rollout is estimated at just over R15 billion at most.
“This amount would be comfortably affordable for the government, were it to reprioritise wasteful programmes and cancel wasteful bailouts. The admission that tax hikes must be considered now, is an admission that government did no forward planning for the vaccine rollout last year,” said Hill-Lewis.
“The DA takes no pleasure in pointing out the obvious to the DG: The National Treasury, and the Executive branch in general, has lost public trust a long time ago, and will certainly not regain it by hiking taxes.”
(SOURCE: BLOOMBERG. Additional reporting by Inside Politics)