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Tax 'capitulation' shows ANC serves self first - DA

Feb 18 2016 14:02
Matthew le Cordeur

Cape Town - At a time when South Africa needs policy certainty, the African National Congress (ANC) has put its interests ahead of the country by postponing the tax law changes, the Democratic Alliance (DA) said on Thursday.

The DA believes the ANC capitulated to the Congress of SA Trade Unions (Cosatu), who had raised serious opposition to the bill and threatened to pull their support of the ANC during the elections.

The ANC “have chosen to bend to Cosatu’s will at the expense of much needed policy certainty at a time when our economy is projected to grow at an anaemic 0.5%,” said Alf Lees, DA’s shadow deputy minister of finance in Parliament.

“This at a time when economic growth and stability should be the apex of government’s priority to create jobs,” said Lees.

“Again the ANC in government has put itself and its survival first and the nation second,” said Lees. “South Africa can ill-afford our economic policy being a victim of an ANC-created mess within the alliance.”

When President Jacob Zuma signed the Taxation Laws Amendment Act late last year he wasn’t aware of Cosatu’s objections to the provident fund proposals, Minister in the Presidency Jeff Radebe told journalists on Thursday morning.

RELATED: Gordhan concedes tax law changes will be costly

However, Radebe said he was not aware of any "threat" from the federation regarding its support for the ruling party during the elections.

"I'm not aware of a Cosatu threat to withdraw their election support based on this act,” said Radebe, who was deployed to engage with Cosatu on behalf of government.

"We don't take decisions based on threats as an ANC government, but when concerns are being raised to government we cannot be unmoved. It is for that reason that we want to defer the implementation of this act so that proper and effective consultation can ensue.”

The DA has asked Finance Minister Pravin Gordhan to make a parliamentary ministerial statement ahead of his budget speech on February 24 to “publically dispel allegations that the postponement of the Tax Bill was a result of insistent and undue political influence from Cosatu,” said Lees.

They also want Gordhan to provide a full explanation on the reasons for this abrupt U-turn, and the impact this will have on the South African economy.

The 2015 Taxation Laws Amendment Act and the Tax Administration Laws Amendment Act, which will likely only be implemented on 1 March 2018, would allow workers to cash in only a third of their savings. The remaining two-thirds had to be used to buy a retirement annuity and be paid out in monthly instalments.

The act was meant to commence on March 1, and would have seen workers who had contributed to provident funds no longer being able to cash in their entire retirement savings on resignation.

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