ActionSA leader Herman Mashaba has highlighted that his party will not consider joining the government of national unity (GNU) unless tax increases are reversed.
Minister of Finance, Enoch Godongwana, had announced a 0.5% VAT increase from May and another 0.5% increase in the next financial year. This would increase the VAT to 16% over the next two years.
Possibility of abandoning the VAT hike
Sunday World previously reported that ActionSA drafted a new budget, and the ANC backed their budget framework report. This means National Treasury is going back to the drawing board to see the possibility of abandoning the VAT hike.
The ANC and ActionSA together hold the majority in the Standing Committee on Finance. And the proposed report recommends that National Treasury look at alternative methods of increasing revenue.
Mashaba said he also heard that the ANC’s National Working Committee (NWS) is considering including ActionSA in a newly formed GNU.
“ActionSA affirms that the party will not give any consideration to this proposal until the VAT increase and income tax bracket creep have been resolved.
“It must be stressed that ActionSA has received no communication from the ANC in this regard. But the party will remain available for constructive engagement around the budget impasse,” said Mashaba.
ActionSA helped end budget deadlock
He said ActionSA acted responsibly by helping to end the national budget deadlock. But only on the condition that the controversial tax increases are removed.
He said ActionSA submitted proposals over the weekend to raise more than R100-billion through other means. Mashaba emphasised that the party’s current focus is solely on reversing the tax hikes.
“For ActionSA, the removal of these increases alone is the focus of our engagement with other parties. And the party would not consider any other matter until these maters are addressed to the satisfaction of South Africans.”
