Radebe on tax law changes: Govt not trying to calm alliance partner

Jeff Radebe
Jeff Radebe

Cape Town  - The government has denied that the decision to table a legislative amendment to the Taxation Laws Amendment Act was a move to appease the ANC's alliance partner, Cosatu.

Minister in the Presidency Jeff Radebe on Thursday announced the decision to backtrack on the act at a post Cabinet media briefing in Parliament.

The Congress of SA Trade Unions (Cosatu) has been outspoken about its unhappiness with the act.

READ: New tax laws will 'poison' Zuma's relationship with workers - Cosatu

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.

However, 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.

READ: Presidency: We consulted widely on tax laws

The act was meant to commence on March 1, and would see workers who had contributed to provident funds no longer being able to cash in their entire retirement savings on resignation.

The 2015 Taxation Laws Amendment Act and the Tax Administration Laws Amendment Act would allow workers to cash in only a third of their savings. The remaining two-thirds had to be used to buy a retirement annuity and be paid out in monthly instalments.

The new rules would only apply to money saved after March 1, 2016. Provident fund members aged 55 or older on that date would be exempted from the regulations.

Radebe on Thursday announced that the commencement date had now been moved to March 1, 2018 to allow for further consultations.

Asked why President Jacob Zuma had signed the act if there were still concerns, Radebe said Zuma had only became aware of this after he signed it.

Radebe also pointed out that it was not only Cosatu who had concerns.

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