TLU SA notes with appreciation the decision not to implement the planned increase in VAT from 15% to 15.5%, which was due to take effect on 1 May. This move, following pressure from various sectors of society, is clear evidence that healthy opposition and collaborative voices can still make a difference. We express our gratitude to every civil organisation, political party and economic thinker who did not remain silent, but instead voiced their objections to a measure that would have disproportionately harmed South Africa’s poorest.
However, we must be honest, choosing not to raise taxes right now is merely a plaster on an open wound. The crisis facing the South African economy is not the result of a single fiscal decision, but rather decades of structurally damaging policy that has made the environment increasingly hostile for entrepreneurs, investors, and workers. South Africa finds itself in the grip of a policy trajectory that increasingly resembles socialism, even communism, where the role of the state continues to expand, while the private sector is choked by regulation, racially discriminatory legislation, and mounting tax pressure.
Our country’s greatest shortfall is not a fiscal deficit, but a deficit of integrity, competence, and political will. The systemic collapse of service delivery, the disintegration of institutions such as the Post Office, SAA, Denel, and Transnet, and the financial disorder in municipalities are no coincidence. They are the direct result of a cadre deployment system where loyalty to a party is valued more highly than the expertise and integrity required to manage services effectively. The market economy functions on trust, on the right to private ownership, on rewarding performance, and on the right to engage in enterprise without fear or favour. These principles are undermined daily by legislation that institutionalises racism and forces entrepreneurs to waste their energy on compliance rather than innovation.
“The South African taxpayer is despondent and exhausted. Every month, billions of rands are paid into the state’s coffers, but what do we receive in return?” asks Bennie van Zyl, general manager of TLU SA. “Power outages, poor security, a healthcare system on the brink of collapse, and schools lacking basic infrastructure. The problem is not too little tax, but the complete incompetence and corruption in the expenditure of that money. While the government convinces itself that it can tax the country into success, the private sector understands that wealth is created only through freedom, hard work, and meaningful investment. This ideological divide between a ‘create and build’ culture in the private sector and a ‘demand and consume’ culture within the ANC is the real cause of economic stagnation.”
We say again: the cancellation of the VAT increase is welcome. But it cannot compensate for a lack of structural reform. It cannot restore trust in a government that breaks its promises every year and repeatedly fails to get the country’s economy back on track. The only way forward is through policy reform, where expertise is prioritised over cadre deployment, where race is removed as a criterion for appointments and contracts, and where corruption is eradicated with an iron fist. Without such a foundational shift, no tax rate will ever be enough, the bottomless pit will only grow deeper.
We call on the government not to treat this current moment of financial reflection merely as a political manoeuvre, but as a turning point. The economy is not the enemy, it is the answer. Make room for market forces to operate, provide certainty around property rights, build a competent and impartial civil service, and support rather than punish. Then South Africans themselves will create the prosperity that this country so desperately needs.
