Tax law delay first step to ultimate worker victory - Cosatu

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Cape Town - Government’s postponement of the implementation of the Tax Laws Amendment Act is the first step towards a final victory for workers, the Congress of South African Trade Unions (Cosatu) said on Thursday.

The union federation has vowed to continue with its planned strike until the parts of the act referring to provident funds are scrapped.

This was in reaction to an announcement on Thursday that the SA government has tabled a proposal to delay the implementation of the Taxation Laws Amendment Act.

The 2015 Taxation Laws Amendment Act and the Tax Administration Laws Amendment Act were meant to come into effect on March 1, and would have seen workers who had contributed to provident funds no longer being able to cash in their entire retirement savings on resignation.

This will now likely only be implemented on March 1 2018.

"The ultimate victory will be the total scrapping of those aspects of the law that workers do not want," said Cosatu national spokesperson Sizwe Pamla.

"Until such time that we have a commitment from government, that they will expunge the aspects of preservation and annuitisation from the law, we will not be satisfied. We will continue to intensify our mobilisation until we get a clear resolution on this matter.

"The campaign that was launched earlier this month and the strike planned for the beginning of March will continue, until the identified aspects of the law are scrapped," he said.

The government on Thursday denied that the decision to table a legislative amendment to the Taxation Laws Amendment Act was a move to appease its alliance partner.

Minister in the Presidency Jeff Radebe, who was deployed to engage with Cosatu on behalf of government, said he was not aware of any "threat" from the federation regarding its support for the ruling party during the elections.

"I'm not aware of a Cosatu threat to withdraw their election support based on this act.

"We don't take decisions based on threats as an ANC government, but when concerns are being raised to government we cannot be unmoved. It is for that reason that we want to defer the implementation of this act so that proper and effective consultation can ensue," Radebe told reporters.

He said when Zuma signed the Taxation Laws Amendment Act late last year he was unaware of Cosatu’s objections to the provident fund proposals.

The Democratic Alliance (DA) meanwhile said the ANC again demonstrated that it put its own interests ahead of the country by postponing the tax law changes, this at a time when South Africa needs policy certainty.

The DA believes the ANC capitulated to Cosatu, who had raised serious opposition to the bill and threatened to pull their support of the ANC during the elections.

The federation's president Sdumo Dlamini went as far as to say it would be difficult to campaign for the ANC in the upcoming local government elections while the new tax laws were still in place.

The ANC “have chosen to bend to Cosatu’s will at the expense of much-needed policy certainty at a time when our economy is projected to grow at an anaemic 0.5%,” said Alf Lees, DA’s shadow deputy minister of finance in parliament.

“This at a time when economic growth and stability should be the apex of government’s priority to create jobs,” said Lees.

Cosatu said the government's decision to backtrack on the regulation signals it has "at last acknowledged and understands that the implementation of this law would have been wrong".

"This decision though is not a final and ultimate solution to the impasse.

"This is not yet a victory for the workers, but it is the first step towards a final victory, which will be the total scrapping of those aspects of the law that workers do not want," Cosatu said.

Cosatu condemned big business for trying to "bulldoze government into not making any compromises with Cosatu" on the issue. "... the federation will not allow (big business) to prey and feast on the workers' retirement savings."

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