President Cyril Ramaphosa
The national lockdown has become a very profitable enterprise for white monopoly capital (WMC) whilst the poor starves. Now government has released two Bills to facilitate this systematic looting which is unleashed under the pretext of fighting COVID-19. The deadline for comment on both Bills – namely the Draft Disaster Management Tax Relief Bill (DMTRB) and the Draft Disaster Management Tax Relief Administration Bill (DMTRAB) – closed on 15 April 2020. The DMTRB and the DMTRAB are essentially about relaxing the tax regime to benefit WMC.
Black First Land First (BLF) has made a written submission to the Finance Standing Committee calling for measures to be redirected to serving the poor instead of WMC. We have also called for the protection and support of township economies which are driven by spaza shops. To this end BLF has presented a Township Economic Charter.
BLF has further called for urgent relief for the informal sector, the unemployed and spaza shops. Food parcels and basic income grant are now overdue.
The two Bills make provisions for deferment of pay-as-you-earn (PAYE) liabilities of tax compliant businesses with gross income of R50 million or less; deferment of provisional tax payments; Employment Tax Incentive (ETI) relief; and COVID-19 Disaster Relief Trusts. The purpose of the Draft DMTRAB is indicated in its preamble as putting in place tax measures that will serve to alleviate the cash flow burdens resulting from the COVID-19 pandemic, of small to medium sized businesses.
These tax breaks are up to four months and deferred to up to 6 months for compliant businesses. BLF believes that the tax relief measures are in the main for the benefit of white owned businesses, and excludes most black business.
The most shocking provision of the Bills relate to the ETI relief measures. A loophole has been created for WMC to claim R500 for each worker employed by it for the next four months provided that s/he earns a salary of less than R6500. The ETI provisions were initially set up to encourage youth employment by giving employers the R500 tax break for the 18 to 29 years category of employees for two years. Now this caveat has been collapsed. WMC can now claim tax relief for the four months period for all workers (who are 18 to 65 years old) earning less than R6500. Furthermore, ETI reimbursements will be expedited during the four-month period and increased to monthly payments so as to channel cash to compliant employers.
These measures, together with a raft of others, show that the government is only concerned with the interests of WMC. We have already seen how, through the bending of rules, banks were given access to R540 billion. Now the tax incentive scheme gives R500 to WMC per qualifying worker for four months whilst giving nothing to the poor. This is legal looting under the pretext of fighting the COVID-19 pandemic.
BLF says redirect the money to the poor!
Issued by Black First Land First, National Coordinating Committee of (BLF NCC)
17 April 2020
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