Cut taxes to stimulate growth – IRR

Taxes are too high and the money that the government does collect is spent inefficiently.

This is the message from the Institute of Race Relations (IRR), which today begins a campaign against high taxes as well as the inefficient spending of taxpayer resources.

Said the IRR’s Makone Maja: ‘The cost of living in South Africa is reaching crisis levels, with more and more people unable to afford basic necessities. People urgently need relief.’

Maja said that cutting VAT from 15% to 11.5%, reducing the fuel levy, and ending preferential procurement were among the relief measures the IRR would be proposing to finance minister Enoch Godongwana and other senior government officials and politicians.

Maja said that by focusing on overcoming inefficient spending of taxpayer resources, taxes could be reduced without affecting service delivery and welfare transfers.

She noted that the South African government was simply too big and bloated to work efficiently, adding that over the past twenty years the government had grown more than the overall South African economy.

‘Between 2002 and 2020 every time a business expanded by R1 an equivalently sized part of the government expanded by R1.61,’ said Maja. This showed how government activity was crowding out other more productive economic activities.

Furthermore, a bloated and inefficient government was hampering economic growth, said Maja, with growth being one of the few ways South Africa could escape its current economic malaise.

‘Taxes can be cut without hampering the provision of much-needed services,’ Maja concluded. ‘The government must act now to put more money back in the pockets of South Africans, who can be counted on to spend it more productively and efficiently than the government ever could.’

You can read more about the campaign here.

Media contact: Makone Maja, IRR Campaign Manager Tel: 079 418 6676 Email: makone@irr.org.za

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za

Sinalo Thuku, Tel: 073 932 8506 Email: sinalo@irr.org.za