The Congress of South African Trade Unions (COSATU) notes Parliament’s adoption of the Budget’s Fiscal Framework and Revenue Proposals.

We welcome Parliament’s adoption of its Finance Committees’ recommendations to halt the Budget’s proposals to hike VAT by 1% over two years and not to adjust personal income tax brackets (PIT) for inflation.  The Committees’ and now Parliament’s call for Treasury to provide alternatives to the VAT and PIT proposals within 30 days will, if honoured, provide invaluable relief to millions of workers drowning in debt and struggling to cope with the rising costs of living.  We are pleased that Parliament and its Finance Committees, led by the African National Congress, endorsed COSATU’s call for alternatives to a tax hike that would inflict unnecessary pain upon the working class. 

Government must treat Parliament’s resolution as a matter of the highest urgency.  It will be an absolute travesty for Parliamentarians to raise the hopes of society that these tax hikes can be avoided, only for Treasury to ghost Parliament, and worse millions of struggling workers and their families.  That will be a calamity and breach of trust that politicians heading into the 2026 local elections dare not play with.  It is sacrosanct that Parliament repeals these tax hikes that will place further pressure on workers’ overstretched wages. 

The Federation has tabled progressive alternative revenue and expenditure proposals to government and Parliament that would raise similar funds without squeezing struggling working- and middle-class families.  These include removing tax loopholes exploited by wealthy individuals and corporations as well as raising taxes upon the rich through income, inheritance, estate and luxury goods duties.  The South African Revenue Service which has been allocated R7.5 billion, and has already delivered an additional R9 billion in revenue collection, should be given space to tackle the R800 billion in outstanding taxes.

Revenue can be generated by engaging the Development Bank, plus the Industrial and Public Investment Corporations to take over some of the state’s economic infrastructure investments and similarly to engage those institutions, the National Skills Fund and the Sectoral Education and Training Authorities to do likewise for public employment programmes.  The Reserve Bank should be requested to increase support for the fiscus from its currency reserves.  The R31 billion that would have been generated through the proposed VAT hike and non-adjustment for PIT brackets can also be compensated for through an expenditure review, including cuts to the executives, travel, advertising, catering and consultants. 

COSATU welcomes the many badly needed allocations to rebuild public services, fill critical frontline vacancies, honour the public service wage agreement giving relief to struggling public servants, investing in key infrastructure to unlock badly needed economic growth, and expanding public employment programmes to help reduce unemployment.  Similarly, we are pleased the Budget contains various relief measures the Federation campaigned for to cushion the poor; e.g. above inflation increases for social grants, a continued fuel price freeze and expanding the basket of food items exempted from VAT.  Whilst we applaud these important allocations, Parliament should adjust the SRD Grants to relieve its recipients from inflation during the Appropriation Bill’s consideration.

We will continue to engage Parliament on sober revenue and expenditure alternatives to the VAT hike and PIT bracket non-adjustment.  Whilst applauding Parliament’s call in defence of the poor and workers, it is critical these now be honoured in deed and resolved with haste before 1 May 2025. 

Issued by COSATU

Matthew Parks (COSATU Parliamentary Coordinator)

Cell: 082 785 0687

Email: matthew@cosatu.org.za