COSATU will present its submission on the Disaster Management Tax Relief and Administration Bills to Parliament’s Standing and Select Committees on Finance today at 9am

July 22, 2020

COSATU will present its submission on the Disaster Management Tax Relief and Administration Bills to Parliament’s Standing and Select Committees on Finance today at 9 am.

We welcomed the tax relief measures provided for by the government to inject liquidity into businesses and the economy. The Federation supports interventions that will save jobs. Our economy is on its knees, we simply cannot afford to lose a single job.

Whilst COSATU appreciates the objectives of the Bills, we are deeply worried about the government’s laissez-faire approach where Treasury naively believes that throwing money with no conditions at employers will save workers’ jobs. Unfortunately, it won’t and in many cases, it will bail out employers using workers’ hard-earned taxes only for those employers to then throw those workers under the bus by retrenching them.

Millions of workers face retrenchments by callous employers. The government cannot simply continue its trajectory of capitulating to employers and demanding nothing in return.

COSATU urges Parliament to amend the Tax Relief Bills to:

· Make the government’s tax relief measures for businesses conditional upon employers retaining jobs;

· Incentivise tax relief for job creation;

· Linking the Employment Tax Incentive to the creation of new jobs;

· Providing for the tax exemption status for the Solidarity Fund and similar Covid-19 relief donations be conditional upon those funds only procuring locally produced goods.

· Industries remaining under full or partial lockdown must be given additional relief to survive like excise duties payment deferrals due to the alcohol industry.

Additional related tax and economic relief interventions Government needs to stop dragging its feet on include:

· Implementing the long-delayed Tax on Scrap Metal Exports;

· Fast-tracking the long delayed Public Procurement Bill;

· Increasing free water and electricity for indigent households;

· Intervening with the banks to ensure they release the R200 billion loans for businesses that government has stood surety for, but of which to date less than 5% has been dispersed;

· Introducing solidarity and wealth taxes on the rich;

· Capacitating SARS to increase customs inspections and collections from less than 5% to 100% of import containers arriving at our ports of entry.

The government needs to be bold. Timidity and hoping for miracles is not an economic recovery strategy. Whilst the government sits idle, workers are paying the price in retrenchments.