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Cape Town - Civil society organisations and trade unions believe the super rich should pay a solidarity tax to enable the National Health Insurance (NHI).
Addressing the parliamentary oversight committee on finance, the Budget and Expenditure Monitoring Forum – comprising the Treatment Action Campaign, Section27, Black Sash, Sonke Gender Justice Network and the National Union of Mine Workers of SA(Numsa) – said for NHI to be implemented, the Reserve Bank should review not only its budget deficit, but its low tax regime.
Forum co-ordinator Thokozile Madonko said that based on current growth it was estimated that the multibillion-rand health insurance would face a shortfall of more than R47 billion by 2016.
The forum said options the government could pursue to stimulate growth were to increase income tax, particularly for the country’s super rich through solidarity tax, subject luxury goods to a high rate of VAT and increase the number of basic goods which were VAT zero rated, including food, medicines and water.
“What we’ve been seeing is a government that’s been giving huge tax breaks to the super wealthy through incentives. These super wealthy don’t really feel the tax pinch… they benefit from the infrastructure, such as roads and street lights, which everybody is being taxed on… We need to review our tax system to ensure that projects such as NHI receive adequate funding. With the current growth the NHI will never be successful. We need to do something drastic, and the super wealthy need to contribute towards this drastic growth,” said Madonko
The Federation of Unions of SA said while the country had made steady progress in the areas of education and health and had established NHI pilots, the government would have to address funding constraints and inefficiencies at public facilities. - The Cape Argus