CSJ_IEJ Statement on Fiscal Policy_Social Justice and VAT_10032025.docx

A joint statement by the Centre for Social Justice (CSJ) and the Institute for Economic Justice (IEJ) urging the South African government to reject proposed Value Added Tax (VAT) increases in the 2025 budget. The organizations argue that such increases are regressive, violate constitutional obligations to social justice, and disproportionately harm low-income households, particularly African women and people with disabilities. They propose alternative revenue-generating strategies, including wealth taxes and improved tax collection, to address budget shortfalls without exacerbating poverty and inequality.

• The CSJ and IEJ oppose a proposed 2 percentage point increase to Value Added Tax (VAT), which would represent a 13.3% increase, arguing that the National Treasury's approach fails to prioritize the most vulnerable and risks worsening hunger, poverty, and inequality.
• Impact assessments conducted by the CSJ using the Social Justice Impact Assessment Matrix (SIAM) tool indicate that even a modest 1 percentage point VAT increase (a 6.9% increase) would cause disproportionate hardship for poor and lower-middle-class households, specifically impacting African women and people with disabilities.
• The organizations argue that fiscal policy must be guided by 'transformative governance' and constitutional obligations to achieve social justice and substantive equality, citing Constitutional Court cases such as Grootboom, Mahlangu, and Van Heerden.
• The statement debunks several arguments in favor of VAT increases, asserting that additional zero-rating of products is insufficient to shield the poor, and that VAT is the worst option among available taxes regarding its impact on inflation, inequality, and destitution.
• The CSJ and IEJ propose several alternative revenue-generating strategies to avoid regressive taxes or cuts to social spending, including implementing a wealth tax on high-net-worth individuals, a digital services tax for multinational corporations, and increasing company tax.
• Additional recommendations for improving the state's fiscal position include enhancing tax collection efficiency to reduce evasion, combating illicit financial flows (IFFs), removing regressive tax breaks, and improving the performance of State-Owned Enterprises (SOEs).

APA

Institute for Economic Justice (n.d.). CSJ_IEJ Statement on Fiscal Policy_Social Justice and VAT_10032025.docx. https://iej.org.za/wp-content/uploads/2025/03/CSJ-IEJ-Statement-Budget-2025.pdf

Chicago

Institute for Economic Justice. CSJ_IEJ Statement on Fiscal Policy_Social Justice and VAT_10032025.docx. n.d. https://iej.org.za/wp-content/uploads/2025/03/CSJ-IEJ-Statement-Budget-2025.pdf.

Wikipedia

{{cite press release |author=Institute for Economic Justice |title=CSJ_IEJ Statement on Fiscal Policy_Social Justice and VAT_10032025.docx |url=https://iej.org.za/wp-content/uploads/2025/03/CSJ-IEJ-Statement-Budget-2025.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{instituteforeconomicjusticendcsjiej, author = {{Institute for Economic Justice}}, title = {{CSJ\_IEJ Statement on Fiscal Policy\_Social Justice and VAT\_10032025.docx}}, publisher = {Institute for Economic Justice}, url = {https://iej.org.za/wp-content/uploads/2025/03/CSJ-IEJ-Statement-Budget-2025.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }