Cutting VAT from 15% to 11.5%, reducing the fuel levy, and ending preferential procurement are among measures the Institute of Race Relations (IRR) will be proposing to the government to relieve the mounting pressure on taxpayers.
These and other relief measures will be sent to finance minister Enoch Godongwana and other senior government officials and politicians.
This forms part of a campaign launched yesterday against high taxes as well as the inefficient spending of taxpayer resources.
The IRR says in a statement that ‘(taxes) are too high and the money that the government does collect is spent inefficiently’.
Says the IRR’s Makone Maja: ‘The cost of living in South Africa is reaching crisis levels, with more and more people unable to afford basic necessities. People urgently need relief.’
Maja says that by ‘focusing on overcoming inefficient spending of taxpayer resources, taxes could be reduced without affecting service delivery and welfare transfers’.
The IRR argues that that government ‘is simply too big and bloated to work efficiently’. Maja notes that over the past twenty years, the government has grown more than the overall South African economy.
‘Between 2002 and 2020, every time a business expanded by R1, an equivalently sized part of the government expanded by R1.61,’ she says. In this way, government activity crowds out other more productive economic activities.
Furthermore, a bloated and inefficient government is hampering economic growth, growth being one of the few ways South Africa can escape its current economic malaise.
‘Taxes can be cut without hampering the provision of much-needed services,’ Maja concludes. ‘The government must act now to put more money back in the pockets of South Africans, who can be counted on to spend it more productively and efficiently than the government ever could.’
You can read more about the campaign here.