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The South African Communist Party (SACP) Political Bureau resolutely reaffirmed the Party’s uncompromising rejection of a Valued-Added Tax (VAT) increase and called upon the government to consider truly sustainable alternatives. These alternatives must include the allocation of sufficient resources to the South African Revenue Service (SARS) to recover the R800 billion in tax revenue lost annually, thus ensuring adequate funding for the national fiscus. The Minister of Finance, Enoch Godongwana, may have attempted to downplay the matter in a recorded video after his press briefing on Wednesday, 19 February 2025, but let there be no misunderstanding: providing SARS with the necessary resources to function optimally is not a benevolent gesture – it is a fundamental duty of the state in its role.

Moreover, the alternatives to increasing VAT must go beyond mere revenue recovery. They should encompass stringent regulation of the capital account, a decisive clampdown on illicit financial flows, and an aggressive confrontation of base erosion and profit shifting (BEPS) tactics by multinational corporations, as well as by companies that were originally South African-based but are listed or headquartered offshore while exploiting the country and its resources.

In addition, the adoption of progressive taxes such as a capital transactions tax and a wealth tax must be pursued. The reality is that corporate income tax rates have been drastically slashed since 1994, leading to a sharp decline in its contribution to the national tax revenue – far outweighed by the disproportionate contributions of VAT and personal income tax. As part of a comprehensive fiscal overhaul, the most recent one per cent reduction in corporate income tax should be reversed to restore the much-needed resources to the national fiscus.

The SACP Political Bureau has called for an urgent Alliance consultative process and tasked the Party’s Secretariat to take a lead in implementing this call with immediate effect.

The SACP Political Bureau convened its ordinary bi-monthly meeting on Friday and Saturday, 21 to 22 February 2025, including on its agenda a strong focus on the aborted national budget presentation, which was initially scheduled for Wednesday, 19 February 2025. The Party had already rejected the budget on Monday, 17 February 2025 – two days before its scheduled presentation – if it entailed a VAT increase. The widespread rejection of a VAT hike became the catalyst for the aborted budget presentation to Parliament on Wednesday by Minister Godongwana.

The SACP categorically opposes the adoption of regressive taxation measures, such as a VAT hike, and the defunding of key pro-poor programmes. A VAT increase, much like cutting funding for essential social services, will only serve to further impoverish the working class and marginalised communities, while shielding the rich and their wealth. This is not merely unfair – it is a direct attack on social equity and justice.

The SACP reiterates its demand for a national budget that prioritises the implementation of the National Health Insurance (NHI) and facilitates a transition to a universal basic income grant for all South Africans. Furthermore, the SACP calls on the government to urgently recapitalise and revitalise state-owned enterprises, reversing the damage wrought by neo-liberal policies that have curtailed state investment prior to our hard-won transition from apartheid in 1994, depriving state-owned enterprises of recapitalisation and labelling belated budget allocations to the affected state-owned enterprises as “bailouts”. As part of ensuring the turnaround of the state-owned enterprises, the government must also roll back the decay of governance and management under the scourge of state capture.

In this critical moment, the SACP remains steadfast in its commitment to progressive fiscal policies that serve the people, not the interests of corporate elites and parasitic capital. It is time for the government to prioritise the needs of the working class, protect economic justice.

The SACP calls on the working class as a whole, particularly organised workers, progressive NGOs and other civil society organisations, to escalate mass mobilisation in defence of the interests of the working class – both as a class in itself and as a class for itself. This mobilisation must culminate in a larger, co-ordinated mass political action on the day the budget presentation returns to Parliament in March 2025.

The SACP will deepen the mobilisation within its own structures, among workers and within working-class communities who bear the brunt of neo-liberal policies and capitalist exploitation. This mobilisation is crucial to roll back the neo-liberal path that both impacts the workers and poor masses of our people and our national economy negatively. The impact includes the crisis of social reproduction on working-class families in informal settlements, townships and rural areas, who are struggling to support life itself amid persistent high levels of unemployment, poverty and inequality. Neo-liberal policies created this situation through de-industrialisation. The budget must contribute to the national imperative to halt de-industrialisation and replace it with re-industrialisation as part of the measures required to drive large-scale employment and expand the tax base to support national revenue.

Issued by the South African Communist Party