Pali Lehohla Says SA Has Enough Resources, Taxes Do Not Need to Increase

(The Post News)- Former statistician-general Pali Lehohla has stated that there is no need for the country to increase value-added tax (VAT) while suggesting that the country borrow from pensions and the Johannesburg Stock Exchange (JSE) as other alternatives.

Lehohla said governance failures were exposed in the Zondo Commission, resulting in the current budget situation. He also said that the country will face these kinds of issues until they are fully addressed. According to him, the postponement of this year’s National Budget Speech will not be the last.

Meanwhile, with just a few hours left before the budget speech is presented before the National Assembly, reports have stated that the African National Congress (ANC) and the Democratic Alliance (DA) have not yet found common ground on the revised budget. The disputes between the two parties come after Minister of Finance Enoch Godongwane proposed a two-percent increase in VAT, which was strongly opposed by the DA and other political parties.

Those against the VAT hike had argued that any increase would hit hard on the have-nots and also affect the interest rates. On the other hand, others suggested an incorporation of corporate taxes, wealth tax, and a pause of government contributions.

Moreover, according to reports, Godongwane wanted to increase the VAT in order to fill gaps in the R60 billion of government finances shortfall and cover key expenditures.

Reacting to his proposal being rejected by even some ANC members in the cabinet, Godongwane said on February 4 that he tabled a budget that he described as an unworkable one, adding that a number of items that would cost over R112 billion would not be funded.

Godongwane said he highlighted several opportunities, such as tax rebates and the removal of income taxes, and VAT is at the centre of the argument because some of his coworkers observed that because he did not put a sum as it was too far from the budget day. According to him, his aim was to prevent a possible leakage.

The minister said some ANC members’ reaction to his proposal poses no division in the party’s fiscal policy, adding that there is no dispute in their strategic trust, which is to ensure that the ANC adequately funds initiatives that impact the impoverished.