Voices against VAT: Protesters propose wealth tax, funding of SARS to alleviate financial burden on the poor

Cosatu president Zingiswa Losi. (Photo: Victoria O'Regan)

12 Mar 2025

Instead of cutting budgets and increasing VAT, there were other solutions to the country’s financial crisis, said protestors before Finance Minister Enoch Godongwana’s budget speech.

Meters away from where Finance Minister Enoch Godongwana is expected to table the delayed budget speech, protestors were clear: a planned VAT hike would be unaffordable for the poor.

They proposed other options to address the budget shortfall, including a wealth tax and funding the South African Revenue Service (SARS), which would allow for more tax collections and revenue.

Hundreds of protestors gathered in Roeland Street in Cape Town on Wednesday, 12 March 2025, before Godongwana’s 2pm address. The Cabinet was locked in meetings before the event with a number of Government of National Unity (GNU) parties suggesting they would reject a reduced VAT increase.

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Godongwana was due to table his speech in February, but this was postponed following the outcry from within the GNU over a planned two percentage point VAT hike.

As Daily Maverick previously explained, an increase in VAT would mean fewer basic foodstuffs in shopping baskets, difficult decisions at till points and, ultimately, pushing families into deeper financial distress.

Read more: What a 2 percentage point VAT increase would actually cost SA households

Speaking to Daily Maverick before the protest, Congress of South African Trade Unions (Cosatu) president Zingiswa Losi said a planned VAT hike would further burden the poor. Utilities, she warned, would go up too.

“We cannot even afford now buying a loaf of bread… A loaf of bread is R17,” she said.

Cosatu president Zingiswa Losi. (Photo: Victoria O'Regan)

Losi said that the poor and unemployed who relied on the R370 Social Relief of Distress (SRD) grant would not be able to afford the VAT increase and would be forced to make tough decisions.

“You must choose whether you are taking your kids to school or you are buying bread… You must negotiate with those two things that are very, very important to you,” she said.

Read more: Godongwana walks a perilous path as he attempts to appease coalition partners

Losi said Cosatu has advised the National Treasury that instead of a VAT hike, more funds should be allocated to SARS to increase its collections and stop illicit financial flows.

She hoped Godongwana took this into account and delivered on some of their proposals.

Abeedah Adams, from People Against Budget Cuts, told Daily Maverick: “We are saying that the spending is where the problem starts.”

The organisation disagreed with sentiments that the SRD grant had broken the budget, and claimed that vulnerable people were being scapegoated by the government.

“We say there could be a wealth tax,” she said, adding: “One percent of South Africans own 50% of our money. If there’s a wealth tax of between 1% to 3% on them, we could easily raise R60-billion.”

Read more: A VAT hike is not the answer, say experts — here are their solutions to SA’s fiscal crisis

Sibabalwe Nobandla from Youth Capital was also at Wednesday’s protest.

He hoped there would be an end to austerity measures and for the government to commit to youth-focused public employment programmes. Nobandla said the government needed to go beyond commitment and act on its plans.

It was just about commitment, it was about accountability too, as efforts such as the Basic Education Employment Initiative (which was meant to fund the employment of teaching assistants) had been promised in the past, but not rolled out.

“However, come October, we still didn’t receive any news about the programme,” he said. DM

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