Earlier this year, it was revealed that the twelve-month extension of the R350 grant announced in February will cost the National Treasury R42 billion. This extension came as a welcomed relief to millions of people who are unemployed and need the grant to survive.
However, Finance Minister Enoch Godongwana suggested that the government would need to find a financially stable way of funding the grant before it can be made permanent.
Godongwana said, “Let me however reiterate that a permanent solution in responding to these challenges is to achieve high and sustained levels of economic growth.”
Civil society groups submitted a memorandum of demands to the National Treasury which proposes raising taxes for a select group of high-earning individuals to fund the grant. They also want the grant to be increased to the upper-bound poverty line which is currently R1,417
The proposal suggests that people earning R1 Million per annum should be taxed 1% to raise funds for the grant. The percentage of tax an individual would be required to pay will increase the more they earn.
Tlou Seopa, representing Amandla.mobi, says the widening gap between the countries rich and poor is increasing and the high unemployment rate increases the need for the grant. The official unemployment rate in South Africa stands at 34.5%.
They explained, “Right now we are at a point where people are just unemployed. People do not have any means of income to support themselves just to get the R20 to buy bread. It's stressful for many people in this country and so we're saying that you can actually find the money you need to tax rich people more”.
Seopa adds that money from the grant could also be raised by ensuring tax is collected effectively. This can be done by ensuring that people are not evading tax which could be done by the South African Revenue Service (SARS).
They conclude that this debate is not a question of money but rather the political will of decision-makers. They have called on politicians to take steps to ensure the grant is extended and increased.
