New tax laws will 'poison' Zuma's relationship with workers - Cosatu

Carin Smith

Cape Town - The Congress of South African Trade Unions (Cosatu) said it is "deeply incensed and disappointed" to hear that President Jacob Zuma has now officially signed all the tax legislation from 2015 into law.

This includes the implementation of the 2015 Tax Laws Amendment Act and the Tax Administration Laws Amendment Act.

This means all retirement reforms related to tax harmonisation on retirement contributions and benefits will come into effect on March 1 2016.

In Cosatu's view this will have "dire and lasting consequences" on the relationship between government and the workers.

"By signing this act the president has poisoned the relations between the ANC-led governments and the workers," Cosatu claimed.

The union regards the legislation as an offense against all working people, who have their deferred wages to look forward to after retirement.

Cosatu said, regardless of the sincerity and noble motives for the new legislation, workers will fight any attempts to impose the compulsory preservation of their deferred wages.

"No government has a right to unilaterally decide for workers, how and when to spend their retirement savings," Cosatu said in a statement.

"The workers reject the notion perpetuated by this action that a tiny elite of government bureaucrats and mandarins are better placed to decide and dictate to workers, when and how to spend their deferred salaries."

Cosatu added that it refuses to be coerced into accepting what it regards as greater government activity and involvement in the affairs of individual workers.

"These savings are part of worker’s hard-earned salaries and should be accessible to the workers, as and when they need them, especially in the absence of a comprehensive social security," said Cosatu.

"It is unacceptable that, when we ask to be given a comprehensive social security and retirement reform discussion paper, which government has failed to deliver for more than ten years, we get given the Taxation Laws Amendment Act. And when we take this process to Nedlac, where government is represented by the National Treasury, they abandon the engagements."

In Cosatu's view the new legislation is a sign the state's "determination to continue to impose the ineffective and much discredited conservative neoliberal macroeconomic framework".

"This framework will continue to protract and defend the basic structure of the class system, where resources are skewed towards the ruling classes and state revenue is moved away from taxing the rich and powerful."

Cosatu said this issue will be a top priority to be discussed at its upcoming Central Executive Committee meeting of the federation next month.