JOHANNESBURG OCTOBER 23 2015(CISA) –Southern Africa Catholic Bishops Conference (SACBC) – Justice and Peace Commission has called on the government to review revenue collection through tax increase on the wealthy, instead of VAT increase.
“We propose that additional income tax brackets be introduced to increase revenue for the government, rather than the introduction of a higher VAT rate that would hurt the poor more than the rich,” Bishop Abel Gabuza, Chairperson of the Justice and Peace Commission for the Southern African Catholic Bishops’ Conference said in a statement.
The bishops further called for review of zero rated goods and a delay in VAT increase until such a time that the government has a comprehensive social security system.
In a submission to the Davis Tax Committee, the bishops said that the government “should retain the zero rated baskets and defer from VAT hikes until such a time that the government has managed to establish a comprehensive social security system.”
“It has also been argued that the intended social goals of zero rating of food items can be achieved more efficiently through the spending side of the budget, especially by targeted and direct social transfers. We are as yet to see social transfer interventions that comprehensively and effectively address the food insecurity problem and ensure adequate nutrition for the poor in South Africa. Until we see this realized through the spending side of the budget, we shall continue to stand in solidarity with the working poor and the unemployed and argue for extensive zero rating,” noted Bishop Gabuza.
The commission urged the government to establish a mechanism for periodic review of zero rated basket to ensure that it targets the poor.
“In the light of this targeting deficiency, we recommend that the National Treasury establishes a mechanism for periodic review of zero rate basket to ensure that these food items correspond with the spending patterns of the poor and accurately reflect their spending habits; to cover the food that are actually consumed by the poor,” said Bishop Gabuza.
