Sin Tax – EFF Thinks Gordhan Placed State Funding Burden On Individuals


Malema’s party, the Economic Freedom Fighters (EFF) asserted that increases in Petrol levy, Sin Tax and Personal Income Tax must be seen as placing the burden of funding the state on individuals as opposed to corporations.

EFF made the assertion in a media statement it issued in response to the budget statement by Finance Minister, Pravin Gordhan.

The Fighters asserted that there is “absolutely no radical economic transformation” about the budget Gordhan presented.

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“In fact, Gordhan has maintained the central ideological framework of neoliberalism: creating a working environment for profit maximization by big corporations.

“This is demonstrated by the continued burden that is put on individuals for the revenue collection and growth.

“Both increases in Petrol levy and Sin Tax on one hand, and Personal Income Tax on the other must be seen as placing the burden of funding the state on individuals as opposed to corporations,” EFF argued.

According to the fighter, there are evidences that many multinational corporations engage in illicit financial flows, tax avoidance and price collusion.

“Yet, there is constant reduction of Company Income Tax (CIT) into the national revenue fund while Personal Income Tax (PIT) trend is of drastic increase over the past years.

“PIT increased from 34% in 2012/13 to estimated 38% in 2016/17, an increase of well over 4% over a period of 5 years. However, CIT continues to decrease, from 20% in 2012/2013 to an estimated 17% in 2016/17, a decrease of well over 3%,” indicated the Fighters. 

EFF said the tax trend demonstrates the pro-capitalist budget planning which to them, indirectly promotes corporate greed.

“The resolutions of economic problems are placed on the individual as opposed to big profit-making corporations that make money out of petrol, alcohol, tobacco and sugar,” EFF lamented. 

Acknowledging that the Finance Minister specified that there will be measures to fight tax avoidance, EFF contended that the measures wouldn’t be effective without a legislation.

Thus, the party indicated that it will lead a process through private members bill to develop laws that will combat illicit financial flows and tax avoidance.

Afterwards, EFF stressed that “radical economic transformation” will never be actualized without the nationalization of banks and land expropriation without compensation.

“If the Minister wants the country to adopt Charter for Economic Rights, it must start with land as a basic human and economic right,” said the party. 

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However, EFF welcomed the budget’s broader interventions to secure the incomes of the poor and unemployed though increases in Social and Old Age grants.

Also, they welcomed the plans for affordable housing market through an increase in the threshold above which transfer duty is paid from R750 000 to R900 000.

Gordhan’s budget statement also highlighted an interest to support higher density housing.

The Minister said subsidies for social housing have been rationalized and, that R600 million over the medium term has been re-prioritized to the Social Housing Regulatory Authority for investment in rental housing units.

EFF welcomed that and the substantial R5 billion additional allocation to higher education saying:

All these interventions will allow the poor leverage in an authorized hostile environment. We (also) celebrate the new conditional grant to provinces; the early childhood development grant.

This is in line with EFF policies that in each and every ward in the country, there must be an early childhood development centre accessible to all children for free.”

According to the Finance Minister, the grant is expected to increase spending in the Children sub-programme within the Welfare Services Policy Development and Implementation Support programme at an average annual rate of 99.8 per cent over the medium term.

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Malema’s party added that the granting of a banking licence to PostBank must be supported.

“…Government institutions and businesses must take their accounts to PostBank to inspire confidence. In addition, PostBank must provide services to our people at an affordable rate and not be driven by profit greed,” added the Fighters.