The 2018 recommendations of government’s Tax Review Committee form a multipronged assault on the working majority in order to enrich a privileged capitalist minority. Masked by a thin veneer of pro-poor rhetoric, these brutal anti-working class measures re-inforce the blows of yet another austerity budget delivered on 21 February 2018; a budget which complies with the dictates of credit rating agencies and investors greedy for profit.

The Finance Minister appointed this Tax Committee for a five-year term in 2013, headed by Judge Dennis Davis. Since its appointment, this Committee has been advising the Finance Ministry on how to bring the country’s tax regime in line with the neoliberal agenda set out in the 2030 National Development Plan.  National Treasury basically used a special report that experts, appointed to this Tax Committee compiled to justify the VAT increase from 14% to 15% on 1 April 2018. It is common knowledge that VAT inflates the prices that the final consumers of goods and services must pay. This implies that the burden of VAT falls mainly on the poorest classes in society. This is the core problem that the Davis Tax Committee has hopelessly evaded through an appeal to the myths, fallacies and lies of bourgeois economic reasoning.

Another expert report investigated South Africa’s readiness for a comprehensive wealth tax, which includes all taxes on the ownership of capital, financial investments, property (estate duties) and donations. Chapter 5 of this report suggests a compelling urgency for such a tax: “The evidence presented on wealth distribution in South Africa has shown that the top 10 per cent of the population own more than 90 per cent of total wealth in the country – leaving 80 per cent of the population with virtually no wealth.” (Davis Tax Committee, 2018 Wealth Tax Feasibility Report, p52) Yet contrary to this fact, the experts concluded that South Africa is far from ready for a comprehensive wealth tax! This conclusion, which directly contradicts the best evidence they assembled, not only boggles the mind but illustrates the class interests the Davis Tax Committee serves. It is a conclusion premised on blind and deep faith in bourgeois ideology and capitalism. It exposes the Davis Tax Committee for what it really is: apologists for capitalism!

Resistance to this latest onslaught on workers has been sporadic and highly uneven. Trade unions have been at the forefront of campaigns against the VAT increase but their opposition and alternatives to this attack on the living standards of working people differ. Some unions reject VAT in its totality (‘Scrap VAT!’) whilst others simply want a longer list of zero-rated items based on ‘the food basket of the average poor family’. The inescapable fact is that the VAT burden weighs on us all – employed, jobless, pensioners or students – and therefore demands a united and determined struggle against it. It calls for a united front against the state taxing the working people for the enrichment of the capitalists.

It is worth repeating  that taxes remain the dominant source of government income and the contributions of workers to this ‘societal fund’ stretch far beyond paying VAT and taxes deducted from wages. As a case in point, think about where corporate taxes come from. In the final analysis, it is a fraction of the profits and wealth that capitalists accumulate from worker exploitation (‘surplus value expropriated from labour power’). This means that the labour power of the working majority is the prime source from which the state finances its budgets. And yet the post-apartheid state has been cutting corporate tax rates from around 43% in the 1990s to roughly 28% today – coupled with other handouts to capitalists (tax rebates, subsidies, etc.). These austerity schemes allow capitalists to pocket more profits which they can then spend as they see fit. This is but one of countless machinations of how the bourgeois state serves their masters in plundering the social wealth that workers produce but do not benefit from. In order to end this rampant theft, working people must fight for a state under their direct control and management.