The federation said it could not accept the increase as it means workers were being forced to "pay for the sins of others".
Johannesburg – Labour federation Cosatu says its members will go on strike if the decision to increase VAT is not scrapped.
The federation said it could not accept the increase as it means workers were being forced to “pay for the sins of others”.
Former finance minister Malusi Gigaba announced the VAT increase at the budget speech a few weeks ago, and said the increase was necessary in order to come up with billions of additional funds.
Currently VAT is set at 14% and will increase by 1% from April.
Gigaba justified the increase by saying the blow of the increase would be cushioned through the above inflation increase of social and old-age grants and the tax exemption of certain products such as brown bread.
But Cosatu said this was not enough and the federation has called for Parliament to reject the increase.
“We call on the National Parliament to either reject VAT Increase of expand the basket of zero rated goods. We demand all food items, water, electricity, books, school uniforms to be zero rated. We have made our submissions to parliament yesterday and if we do not get any positive response, we will mobilize workers for a strike against the VAT increase,” said Bheki Ntshalintshali, Cosatu secretary general at the federation’s post central executive committee briefing.
The VAT increase has also been widely criticized by opposition parties.
The DA even marched at the weekend calling for the increase to be rejected by the public.
At a post-cabinet briefing on Thursday, Communications Minister Nomvula Mokonyane said the increase in the VAT would remain in place, but said government was looking at expanding the basket of goods that were exempt from tax.
The current food basket of tax exempt products includes; maize meal, samp, dried beans, brown bread and powered milked.