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IOL News reports that the Congress of SA Trade Unions (Cosatu) has weighed in on the contentious issue of a proposed value-added tax (VAT) hike by suggesting that Treasury should start discussions with the Government Employees Pension Fund (GEPF) over a pension fund contribution holiday.
The government is scrambling to find a solution a R60 billion shortfall in the national budget. Finance Minister Enoch Gondongwana is expected to present a revised budget to Cabinet on Monday after last month's budget was postponed because Government of National Unity (GNU) partners could not reach consensus on Godongwana's decision to increase VAT by 2%. Apparently, President Cyril Ramaphosa will propose a VAT increase of between 0.5% and 1% but the DA led by John Steenhuisen is adamant that VAT should remain at 15% and no hike should be allowed. The new date for the budget is 12 March. Cosatu’s Matthew Parks Parks said the federation was against any tax increase for the poor. It has given government a variety of options to consider instead. One option could be a government employee pension fund contribution holiday. According to Parks, the GEPF is 110% overfunded and there is space for government to have a one-year contribution holiday, amounting to R53bn. He pointed out that the GEPF was a defined benefit scheme and whether it made profits or losses, the benefit paid out to retiring workers would remain the same.
- Read the full original of the report in the above regard by Mashudu Sadike at IOL News
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