EDITORIAL: Protect poor from load-shedding tax

This newspaper has detailed the pressures South Africans are experiencing from the combined effect of an economy sucker-punched by rolling blackouts, gutted state services and political inertia.

The unemployed and the working poor do not really feature on the government’s radar as contributing substantially to the fiscus though income tax, and are blessed with the political class’s attention only every five years. But they do contribute via indirect taxes and this increasingly requires justification.

Living on grants, in the informal economy and on low-paid work, these people — millions of our compatriots — are struggling to feed themselves and their families.

In mid-2022, Stats SA said that 11% of South Africans go hungry or are food insecure. Since then, only the wealthy and some in the middle class have been able to create buffers between themselves and the state’s failure to prove sufficient electricity, water, security, transport, education and healthcare of an acceptable quality. Our circumstances have deteriorated profoundly since then, and it is reasonable to infer that our already world-leading inequality has worsened.

Many of these problems have been decades in the making and will take decades to fix. This reality will hit the poor hardest. As a result, high food prices ought to be a priority for our government. It must be common cause that it is without any equivocation unconscionable and indefensible that South Africans go hungry, and that as many as one in three of our children experienced stunted growth due to poor nutrition.

In an environment like this, fast and creative solutions ought to be found. Taxes, road accident fund and other levies paid for diesel used in the food value chain for their generators, trucks and tractors should be refunded by the receiver.

On Wednesday, a group of SA’s biggest food manufacturers and retailers wrote to the president asking for exactly this. We would add, however, that this ought to be done on the basis that waived taxes and levies should be used by these companies to subsidise the price of staples already zero-rated for VAT. This will bring swift relief to those struggling to feed their families.

In the first half of the financial year, Shoprite said it spent R560m on diesel to maintain its cold chain. A back-of-the-envelope calculation reveals that taxes and levies on this account for something in the region of R1m a day that might be returned to struggling customers.

The National Treasury may not like this idea, but, as the rest of us are finding in our own lives, it will be necessary to find savings elsewhere.