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ActionSA firmly opposes any tax increases in this year’s Budget Speech unless accompanied by deep cuts to government luxuries, including Cabinet perks and redundant state functions such as Deputy Ministers. South Africans cannot be expected to shoulder higher taxes—whether VAT, personal income tax, or company tax—while state corruption and mismanagement continue unchecked.

While VAT may be the most effective of the three main taxes, it disproportionately harms the poorest and most vulnerable. For too long, citizens have paid the price for government failures, from collapsing service delivery to skyrocketing electricity costs. 

Electricity tariffs have surged by 135% in eight years, yet the average income has grown by less than 10%. Another 12.7% hike last month, approved by NERSA, has pushed households and businesses to the brink. ArcelorMittal South Africa cited unsustainable electricity prices as a key reason for shutting its long steel business, threatening up to 100 000 jobs.

Meanwhile, a forensic investigation into Eskom’s prepaid electricity token system uncovered a "significant number" of illegal prepaid power tokens created in the 2023/24 financial year. This fraud, facilitated by individuals with privileged access within Eskom’s IT ecosystem, cost Eskom billions in lost revenue and illustrates the entrenched corruption and mismanagement that continues to cripple the power provider. 

Furthermore, state institutions meant to protect workers have become hubs of corruption. The Compensation Fund, which assists injured workers, has received 12 consecutive audit disclaimers, and the Unemployment Insurance Fund (UIF) has had five straight years of qualified audits. It is unacceptable that year after year, these failures are exposed, discussed, and then forgotten, while workers continue to suffer.

Meanwhile, between July and December 2023, 14 Ministries spent R94.5 million on travel, and over six years, the Department of Higher Education and its entities wasted R285.2 million on lavish meetings and functions—while students struggle for funding.

South Africans deserve a government that cuts waste before demanding more from taxpayers. No tax increase can be justified, unless government cuts waste, corruption, mismanagement and fraud. ActionSA will not support a Budget that demands citizens to pay for state failures that continue under the government of national unity.

Issued by ActionSA Member of Parliament Alan Beesley