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Press Release

TJSA calls for immediate economic kickstart to save lives

Wednesday 22 April 2020 – TAX Justice South Africa (TJSA) today urges the President to immediately kickstart the economy before his R500 billion rescue package lands South Africans with debts that could be deadlier than the virus we are fighting.

TJSA’s Yusuf Abramjee says: “President Ramaphosa’s aid deal is a clear recognition of the intense hardship being felt by families and the businesses that sustain those families all over the nation. It will provide some desperately needed relief.

“But it will also mean massively more borrowing for a nation already crippled by debt and unemployment, which has only been exacerbated by the strictest lockdown in the world.

“We need to be following a very simple rule:  If we are borrowing huge amounts of money and putting that debt on the head of every South African then we should be also be collecting as much of the money due to us as possible.

“Some ill-thought rules have already robbed the nation of vital revenues and should be reviewed immediately before our locked down economy collapses into a depression that will bring hunger, starvation and a loss of life far greater than the coronavirus.”

TJSA calls for the Presidency to implement two simple measures immediately:

  • Allow supermarkets, fuel station stores and spaza shops to sell their full inventory of goods
  • Allow transport of SA-produced goods for export

“With a stroke of pen, the President could lift the unnecessary restrictions on what shoppers can buy when they visit their local store. It would have no negative effect on the objective of lockdown and would generate vital revenue for the State.

“The financial impact of the cigarette ban alone has been devastating, as it costs the Treasury R35 million a day in lost excise revenues.

“Illicit cigarettes are flooding the market at massively inflated prices, delivering no tax to the country and actively increasing the movement of people – the very thing the lockdown is supposed to prevent.

“Almost R1 billion has already been lost in this manner. That money would have paid for the President’s promise on food parcels and protective equipment for frontline workers FIVE times over. Instead, that crucial money is being taken by criminals selling their illegal products and all law-abiding South Africans will end up paying increased taxes to pay back the money we now must borrow.

“Any hindrance to the export of SA goods is also costing us dearly right now. With the rand at historically low levels, we could be bringing in much needed revenue and establishing markets that will help us to recover from this crisis.

“For example, the ban on transporting alcohol alone is costing winemakers R175 million a week in lost exports and is threatening to destroy an industry that contributes R49 billion to the economy every year. TJSA advocates allowing immediate transport of all SA goods for export.

“The President has promised to lead SA out of this crisis: he is proceeding cautiously, but he can take immediate steps to stop us falling into a black hole of debt for decades.”

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