ANC taxing households into hunger

25 September 2022

Note to editors: Please find attached soundbite by Dr Dion George MP.

With soaring food prices wreaking havoc on low- and middle income South African consumers, more and more households are unable to put enough food on the table. This is a direct result of the ANC’s failure to implement desperately needed fiscal relief measures.

During this past week’s oral question session, when Minister Godongwana was asked by the DA, on whether his department would consider increasing the number of food items that are zero rated for VAT, the Minister defended his inaction by citing a study completed in 2018 that deemed an enlargement of the zero-rated food basket to be inefficient and to the benefit of wealthier consumers. Economic conditions have deteriorated significantly since then, and the Minister has not responded.

It is clear that the ANC lacks the political will to tackle the inflation emergency and it is because of such short-sighted reasoning that the constant overreaches of the government into the pockets of South African consumers are driving more and more households into hunger.

Every income, every activity, every piece of property, every person in the country is subject to a battery of taxes by a government that wastes and steals significant amounts of hard-working taxpayers money. There is of course nothing new about this; what is new is that the accelerating drive of the government to tax has begun to run into determined resistance on the part of the South African citizenry, and unfortunately for the governing party, South Africans, stubborn as they are, care more about upward spiralling fuel and food prices than the ANC and its cronies would like.

Today vast amounts are spent by the Government on budget items that do not serve the public, such as the so-called R50 million donation to Cuba, the allocated R2 billion VIP Protection budget for the SAPS to protect high ranking government officials, and the billions of rands are spent on luxury accommodation and catering by unavailing ministerial departments.

In his response the Minister did however admit that, if requested, he would be prepared to subject the DA’s proposals to drop VAT duties (zero-rated vat) on basic food items such as chicken, beef, tinned beans, wheat flour, margarine, peanut butter, baby food, tea, coffee, and soup powder to an expert panel analysis.

A zero-vat status on the above-mentioned items proposed by the DA will have a negligible impact on the national fiscus, but it would mean the world of difference to those who are living in food poverty. It is therefore unconscionable for the Minister not to consider diverting funds from useless budget items to protect those who are most vulnerable in our society.

The DA is the only party that has the political will to tackle the rising cost of living and food crises. Given the Minister of Finance’s admission, and the enormous benefit that will be derived from the poor, I wrote to the Minister to formally request that he subject the proposed items to be rated at zero vat by an expert panel.

Issued by Dion George, DA Shadow Minister of Finance, 25 September 2022