BOSA's R180bn plan to reverse the VAT hike

Build One South Africa (BOSA) leader Mmusi Maimane has reiterated his party’s commitment to collaborating with other political factions to amend the fiscal framework and eliminate the VAT increase in the 2025/26 Budget.

Addressing the media in Parliament, Maimane said a solution must be found by the parties working on adjusting the Budget.

“We stand ready to work with all parties that are committed to a credible, inclusive, and growth-oriented Budget. There is no time for political theatrics, no time for us to play games and say one said this and this one goes to court,” Maimane said.

He made the statement hours before his party was to attend a meeting with the ANC and other Government of National Unity (GNU) parties that voted in support of the fiscal framework last week.

Maimane defended their vote for the fiscal framework last week, saying it would have been a disaster had it not gone through.

“It literally means that you deal with a country without a Budget.”

He said their proposals to be tabled at the meeting with other parties came with a number of conditions.

BOSA deputy leader Nobuntu Nobuntu Hlazo-Webster said BOSA was clear that the reversal of VAT increase and tax creep has to happen.

Hlazo-Webster also said one of their conditions was a full review of government expenditure to identify areas where cuts could be made.

BOSA wants departments with overlapping mandates to be streamlined and vanity projects to be scrapped to redirect funds towards education, health, infrastructure, and job creation.

“There needs to be adoption of national growth charter to drive jobs. We still have an incredibly high unemployment rate close to 40%. We need to be able to attract investment and create jobs,” Hlazo-Webster said.

Maimane said they have identified close to R180 billion in new revenue that can be sourced.

Their plan identified a ramp-up of National Empowerment Fund spending, the introduction of a 6% sin tax on online gambling, scrapping the Employment Tax Incentive, freezing middle and senior management hiring in government, rationalising diplomatic missions, and cutting VIP protection for politicians, among others.

Maimane said the instability within the GNU must be resolved soon and quite urgently.

“What we need is a government that acts as a unitary voice. We must settle whatever the impasse and we must decide on a government that is stable,” he added.

Asked if BOSA would join the GNU, Hlazo-Webster said her party had been clear from the start regarding the coalition as there had been no roadmap where South Africa was going.

“Until such a roadmap is there, that is one of the things we would want to engage on,” she said.

Maimane added that there was an appetite across all parties to find workable solutions by parties that have remained inside the GNU and not become excited about court action.

Meanwhile, the GOOD Party said there were viable alternatives to raise enough revenue and that there should be no reversal of commitments to social spending and infrastructure.

The party's secretary-general Brett Herron also said they welcomed the proposal of an expenditure review process.

“We have called for a fresh, zero-based, approach to budgeting for the past six years to eliminate waste and free resources. The process will, however, require time and is realistically only achievable by the Medium-Term Budget Policy Statement at the earliest.”

Herron said to compensate for reversing the VAT hike and tax creep in the Budget, tax breaks for the wealthy should be reduced, the Employment Tax Incentive be scrapped, and withdrawing funds to top up the shortfall from the Gold and Foreign Exchange Reserve Account.

He also said a comprehensive and transparent expenditure review process, including a review of the necessity for the provincial tier of government, should be implemented as well as Wealth Tax and disposal of inefficient SOEs.

In its submission, the EFF noted the ANC-led government had in 2018 committed to review the VAT increase from 14% to 15% only for that never to happen.

It also said the 2025 Budget does not adjust personal income tax brackets and rebates for inflation.

“The EFF proposes a 4.5% inflationary adjustment to personal income tax brackets to protect wage earners from this creeping tax burden. This adjustment will ensure that the tax system remains fair and does not penalise workers for basic cost-of-living salary increases, a bracket creep protection not tax cut.”

The Red Berets also proposed the urgent introduction of a Wealth Tax, specifically targeting underutilised and luxury landholdings.

“The argument that such a tax will cause capital flight is overstated - land, unlike financial assets, cannot be relocated offshore.”

The EFF said there should be a once-off Wealth tax on all trusts established before 1994 and an annual declaration and progressive levy on inherited wealth exceeding R10 million.

The party added that SARS should be allocated an additional R4 billion in the 2025/26 financial year, and further increase of R500 million in 2026/27, and be adjusted annually for inflation in the outer years of the Medium-Term Expenditure Framework.

Cape Times