South Africa: National Treasury suggests tax hike to rollout COVID-19 vaccines

“One way or the other, we will have to bite the bullet, we have to do it for the sake of South Africans and saving lives. We have to do everything in our power to make sure that we buy these vaccines and vaccinate South Africans."


Devdiscourse News Desk | Johannesburg | Updated: 20-01-2021 17:46 IST | Created: 20-01-2021 17:46 IST
South Africa: National Treasury suggests tax hike to rollout COVID-19 vaccines
Representative image Image Credit: ANI
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To roll out COVID-19 jabs in South Africa, the country's National Treasury has suggested tax hikes to fund the vaccines in COVID-19 hotspots, according to a report by CNBC AFRICA. 

Reportedly said by Dondo Mogajane, the Director General of the National Treasury, tax hikes were considered as one option to fund the COVID-19 vaccines that approximately cost $1 billion to the country. The final call would be made by Tito Mboweni, the Finance Minister in February while announcing the budget. 

Stating in a radio show, Mogajane said, “if we have to tax to ensure that we get this money, we will do it. On the Budget Day, we will be detailing what option (we take) and it will be detailed enough to indicate where the money will come from... Commitment is there to pay for this".

Securing half of the total numbers of positive COVID-19 cases in the continent, South Africa recorded more than 1.3 million COVID-19 cases, and 38,000 deaths, as per the report. Observing the impact of the virus, Cyril Ramaphosa, the President established an inter-ministerial committee earlier on Tuesday. Chaired by David Mabuza, the committee is established for the smooth functioning vaccine rollout. 

Being one of the countries securing early doses of COVID-19, South Africa has already received 20 million COVID-19 doses that are scheduled to be distributed by the first half of 2021. The country is also expecting a second consignment of over 500,000 doses by the Serum Institute of India (SII) in February. 

The government secures few choices in saving the lives of its people, Mogajane said. 

“One way or the other, we will have to bite the bullet, we have to do it for the sake of South Africans and saving lives. We have to do everything in our power to make sure that we buy these vaccines and vaccinate South Africans", he added. 

However, a hike in taxes had led to a recession last year noting sub-optimal growth, argued Raymond Parsons, the Professor of North West University Business School. He added, “…Raising the tax burden may be inevitable but it is the least desirable option, especially if it simply creates a negative ‘tax-and-spend’ cycle. It also comes at a time when a ‘low trust’ situation prevails in SA about the use of government funds. Tax hikes should be minimized so as not to damage economic recovery,”

 

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