CSJ and IEJ Joint Statement on the South African Budget: A Call for Social Justice and Transformative Governance

The Centre for Social Justice (CSJ) and the Institute for Economic Justice (IEJ) oppose a proposed VAT increase in South Africa, claiming it disproportionately harms low-income households, African women, and people with disabilities. They argue that such a regressive tax is incongruent with the constitutional mandate for transformative governance and social justice. Instead, the organizations advocate for progressive alternatives, including wealth taxes, increased company tax, and improved tax collection efficiency, to address budget shortfalls without exacerbating hunger and poverty.

• A proposed VAT increase of 2 percentage points (a 13.3% increase) led to the postponement of the budget speech from 19 February 2025 due to widespread opposition.
• Impact assessments using the Social Justice Impact Assessment Matrix (SIAM) tool indicate that even a 1 percentage point VAT increase (6.9% increase) would cause disproportionate hardship for poor and lower middle-class households, specifically impacting African women and people with disabilities.
• The authors reject the claim that additional zero-rating of essential products would shield the poor, stating there is limited scope for further zero-rating and uncertainty regarding whether previous expansions in 2019 benefited consumers.
• The document asserts that VAT is the worst option among fiscal choices regarding inflation, inequality, and destitution, and is likely worse for economic growth due to the spending propensities of different households.
• The authors argue that fiscal policy must adhere to constitutional guardrails and precedents from the Constitutional Court (such as Grootboom and Mahlangu), which mandate the prioritisation of social justice and the 'plugging the apartheid gap'.
• Proposed alternative revenue-generating strategies include implementing a wealth tax on high-net-worth individuals, a digital services tax for multinational corporations, increasing company tax, and adjusting income tax brackets for higher earners.
• Other suggested fiscal measures include improving tax collection efficiency, combating illicit financial flows (IFFs), removing regressive tax breaks, and leveraging the state balance sheet through improved SOE performance or strategic asset sales.

APA

Institute for Economic Justice (2025). CSJ and IEJ Joint Statement on the South African Budget: A Call for Social Justice and Transformative Governance. https://iej.org.za/wp-content/uploads/2025/03/CSJ-IEJ-Statement-Budget-2025.pdf

Chicago

Institute for Economic Justice. CSJ and IEJ Joint Statement on the South African Budget: A Call for Social Justice and Transformative Governance. 2025. 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 and IEJ Joint Statement on the South African Budget: A Call for Social Justice and Transformative Governance |date=10 March 2025 |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{instituteforeconomicjustice2025csj, author = {{Institute for Economic Justice}}, title = {{CSJ and IEJ Joint Statement on the South African Budget: A Call for Social Justice and Transformative Governance}}, publisher = {Institute for Economic Justice}, year = {2025}, month = mar, 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} }