Ricochet News

'VAT hike shows tax system is regressive' COSATU Eastern Cape

Jul 2, 2018
'VAT hike shows tax system is regressive' COSATU Eastern Cape

Following its 13th Provincial Congress held over the weekend, the Congress of South African Trade Unions (COSATU) Eastern Cape reaffirmed its position that the expropriation of land without compensation must be done in a way that promotes the public control and ownership of the land among other issues.

Reconfigured Alliance

According to Xolani Malamlela, COSATU Eastern Cape Provincial Secretary, the congress also affirmed that the most direct and scientific route to socialism remains National Democratic Revolution "and for it to be deepened it requires ruling out the alliance status quo, that the modus operandi of the Alliance is outdated and will, going forward, not be able to hold the Alliance together".

"More often than not, the African National Congress (ANC) assumes the role of the final arbiter within the Alliance, lack of consultation, unilateral decisions taken on behalf of all by one partner," he described.

"It is in this context that COSATU is of a view that reconfiguration of the Alliance is a matter of must. Alliance has to be a political centre of power as agreed post Polokwane and this is possible when all independent alliance partners are treated as equal partners.

"Reconfigured alliance should translate to the alliance secretariat managing the operations of the alliance and should have requisite operational capacity to execute its work and this include an extended full time staff member to focus on alliance work."

VAT Increase

Malamlela said that the congress voiced its total rejection of the VAT increases in that as it salutes workers for being resolute in demanding decent salary increases in every round of salary negotiations as evidenced recently but such victories are quickly eroded by increases in transport costs, municipal tariffs, sky rocketing fuel costs, exorbitant food prices, education fees and most recently unwarranted VAT increases and erosion of pension funds through rising costs of living.

"It is for these reasons that COSATU continues to mobilize workers and communities behind the living wage. The recent won struggle with its implementation should not be further postponed is only a beginning as COSATU will now intensify struggle for a living wage, as there is dialectical link between minimum wage and living wage which our detractors dismally fail to understand," he said.   

"The increase in VAT by 1% is an indication that the tax system is regressive and not progressive. To this end, COSATU will lead a rolling class action against the VAT increase working with progressive social forces."


Malamlela said that whilst the call for an inquiry on state capture is most welcomed, a deeper interrogation to an extent of other forms of state capture on the provincial and municipal spheres of government requires as much attention.

"The money meant for the poor cannot be stolen by fat cats any further whilst workers are earning peanuts if not driven out of work. In this regard COSATU in the province will revive its rolling class action and fight against corruption."

Privatisation of SoE’s

He added that the congress agreed to actively campaign for the rejection of the privatisation of SoE’s - "whether partially or wholly as this will result in job losses, state capture and corruption and weakening of state capacity".

"The congress expressed its firm rejection of the backdoor privatisation of state entities which will lead to incapacitation of the state to adequately serve its purpose, and place our country on a trajectory of radical economic transformation," Malamlela said.

"It is in this context that as COSATU, we are calling for a review of contracts between ESKOM and the Independent Power Producers (IPP) to allow space for due diligence, and to avoid any possibility of corporate capture of our state. As a matter of principle we are opposed to corporate capture regardless of the role players."

Fight against outsourcing

Malamlela said that the congress mandated the federation and its affiliates to leave no stone unturned towards ensuring that the use of consultants by provincial and local government in the province is eliminated and further that services such as cleaning and security are insourced, this will go a long way towards building the capacity of the state while ensuring that workers earn decent salaries with better working conditions.

On Land Expropriation

He said that the meeting reaffirmed the COSATU position that the expropriation of land without compensation must be done in a way that promotes the public control and ownership of the land.

"We must liberate the land from private ownership and that it must be used to resolve the problems facing our country, as opposed to a futile exercise of distributing title deeds. In this regard, the federation will actively participate in the debates around expropriation of land without compensation and make written submissions."

On SACP and state and popular power

COSATU Eastern Cape noted that the South African Communist Party's (SACP) 14th National Congress resolved to actively contest state power through elections, "and that this may, or may not be, within an umbrella of a reconfigured Alliance".

"While COSATU in harnessing its unity will continue to engage with all of its affiliates and members as to arrive at most unifying position by the time of COSATU National Congress, but what is clear is that alliance status qou of operating is out dated and incapable of taking our revolution forward," Malamlela said.

"Therefore, working modalities of the alliance have to be reconfigured, there cannot be any blank cheque to one alliance partner going forward.

"The congress resolve that in an event the SACP proceed to openly contest state power through the left popular front, COSATU will have to be vigilant and not isolate the vanguard and throw it in a decisive class battle without the proletariat. In this context the federation will have to support the vanguard of the working class as its long time insurance."

On challenges in SAMWU

Malamlela said that the 13th Provincial Congress also expressed its appreciation for the efforts done by the COSATU Central Executive Committee (CEC) and the Provincial Alliance to unify the South African Municipal Workers’ Union (SAMWU).

"The Congress endorsed the COSATU CEC framework for setting aside all decisions taken to dismiss or suspend comrades within the leadership of SAMWU and focus in uniting and servicing members of SAMWU," he said.

"In this regard the incoming POB’s are directed to work tirelessly with all parties within SAMWU towards ensuring its stability guided by CEC framework. The newly elected POBs are also directed to assist all COSATU affiliates, in this regards the congress fully support the CEC proposal of the federation to have more power to decisively intervene in its affiliates."