Government’s postponement of the Tax Law implementation is not an ultimate victory

The Congress of South African Trade Unions has noted the government’s decision to postpone the implementation of the New Tax Amendment Act for two years. This decision signals that government has at last acknowledged and understands, that the implementation of this law would have been wrong. This decision though is not a final and ultimate solution to the impasse. This is not yet a victory for the workers, but it is the first step towards a final victory, which will be the total scrapping of those aspects of the law that workers do not want.

The mandate from workers was not to secure a postponement but to get government to commit that they will expunge all the areas that prevent workers from accessing their money. What workers want to hear is; when is government going to expunge the sections of the law that stops workers from making lump sum withdrawals from provident funds.

We are happy to allow the section that allows members of the provident fund to pay less tax because this will greatly benefit workers. But there can be no annuitisation and preservation without workers consent. Workers shall never agree to negotiate tax reforms in the absence of a Comprehensive Social Security paper. We expect that both National Treasury and the Department of Social Development will present this paper as soon as possible at NEDLAC.

Until such time that we have a commitment from government, that they will expunge the aspects of preservation and annuitisation from the law, we will not be satisfied. We will continue to intensify our mobilisation until we get a clear resolution on this matter. The campaign that was launched earlier this month and the strike planned for the beginning of March will continue, until the identified aspects of the law are scrapped. We will also table the latest developments to our upcoming Central Executive Committee Meeting for further discussions.

We condemn big business for trying to bulldoze government into not making any compromises with COSATU on this issue. They are continuing to prey on the workers and the message we have for them is that the federation will not allow them to prey and feast on the workers retirement savings.

COSATU also feels strongly that the time has come for workers to dictate how their money should be invested. The retirement savings of workers should be invested in job intensive industries and also in sectors that will benefit the working class as whole. We are not going to allow that the money that belongs to the workers be invested in vanity projects that allow the greedy few to make exorbitant profits.

We reiterate our rejection of the piecemeal approach to retirement reforms and still demand that government should release the Comprehensive Social Security & Retirement reform paper without any further delay at NEDLAC.Retirement Funds are a deferred wage of workers and neither government nor employers have any business interfering in them.

Statement issued by COSATU, 18 February 2016