S-African MP suggests ‘Apartheid tax’ to protect poor from VAT increase

(MENAFN) South African MP and Economic Freedom Fighters (EFF) Treasurer-General Omphile Maotwe has called on the government to implement an “apartheid tax” targeting inherited wealth from the apartheid era, instead of going ahead with the planned increase in Value Added Tax (VAT).

Speaking outside the Western Cape High Court on Tuesday, during a hearing on the legality of the proposed VAT hike, Maotwe argued that taxing historic wealth would generate significantly more revenue than the R28 billion shortfall the government is attempting to address. She also suggested that this approach would reduce internal tensions within the Government of National Unity (GNU) over how to manage the country’s finances.

Maotwe criticized Finance Minister Enoch Godongwana for what she described as a lack of political courage to impose taxes on the wealthy. She accused him of targeting the poor with VAT increases, which she warned would deepen poverty, inequality, and unemployment.

“You’ll raise far more than R28 billion through a wealth tax. But instead, the government always targets the poor. Our people are already struggling to survive, and the VAT hike will push them further into poverty,” Maotwe said.

The EFF and the Democratic Alliance (DA) have jointly petitioned the court to block the VAT increase, arguing it will severely affect low-income households. The court has not yet delivered a ruling. The VAT increase is scheduled to take effect on May 1.

In response, Minister Godongwana defended the VAT hike, stating it was necessary to maintain essential services such as healthcare, education, transport, and public safety. The Treasury argued in court that VAT was the most feasible option amid limited borrowing capacity and financial constraints, warning that further budget cuts could pose additional risks.

Maotwe, however, advocated for a more progressive tax system. She urged the government to impose a wealth tax and close tax loopholes used by trusts and luxury property owners to avoid fair taxation. She also proposed raising the corporate tax rate from 27% to 29%, citing strong earnings in the private sector.

“We don’t need to increase VAT,” Maotwe said. “We need to tax the rich—those holding wealth in trusts and luxury assets. It’s time they pay their fair share.”

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