WELFARE STATE: Give VAT back to those who deserve it most.

WE’RE not asking for bread, although this used to be a rallying cry for the poor, the world over. We’re not asking for government subsidies on milk, or delivery of food parcels to those in need. No, all we are asking for is for our VAT BACK!

Giving VAT BACK to the poor, will alleviate pressure on other social services while enabling us to take control of our lives. VAT is an example of the most direct form of taxation, yet for those who spend all their income on food, clothing and shelter, VAT is just another example of big government and its hidden hand in our pockets, what economists euphemistically call “indirect taxation”.

How much tax actually reaches the poor when we are most in need? The answer is nothing or very little. More often than not, our pennys are handed over to the state to be spent on big budget items, such as military frigates, luxury airliners for presidents, and state banquets for foreign politicians.

By demanding VAT BACK — welfare in the form of a tax rebate, a leg-up rather than a hand-down — citizens are merely asking for what is rightfully theirs: How can you be 100% sure that you will never be left without a job? Homeless or without food on the table? Desperate or in need of assistance? Often dire straits coincide with other unexpected problems in life: A death in the family, a new-born child, a situation out of ones control, even marriage, separation or divorce.

Currently the only citizens to receive any welfare grants are those who qualify for assistance as a result of old-age, mental or physical disability, and children up until age 14. Which means that unless you are aged, infirm, or the legal guardian of a child, you could be left walking the street at night, seeking shelter, begging for aid, coerced into red-light employment or worse.


DEMAND your VAT back. Believe it or not, the average South African will hand over the government *R33 600 spent entirely on food and given to the exchequer in the form of VAT. This is money out of your own pocket! What do we get in return for that expense? Very little. A parliament that does nothing but pass laws. A judiciary that does nothing except complicate the law-making process, and a president who spends most of the time outside of the country, fixing other country’s problems.

Where is the government when you suffer from unemployment? Who is their to look after you when you are ill? State Hospitals in spite of their elegant sounding names, do very little and still expect you to pay for services at the end of the day. Receiving your VAT BACK could be the start to a new life. Just imagine what the money could do. Suppose for argument sake that you considered VAT not as a tax paid over to the state but as an interest-free loan given to the fiscus on the understanding that it would eventually be given back, a loan instead of the forced hand-out to big government, red-tape and bureacracy that it really is.

Over the years your stake in the South African fiscus and the economy would be enormous, pure capital given away at zero percent and used to loan out to banks and other institutions at 8%. So why not ask for your VAT BACK now? Supposing a 30 year old male went on welfare payments today, “the dole” would take thirty years of paying back R500 a month directly into his account to pay off the initial “loan” granted to the fiscus, a loan given without much thought, just via the extraction of value-added capital through the course of ones lifetime.


A FIFTY year old female citizen put on the dole today would never hope to receive all her money back, private money given to the fiscus through the course of ones lifetime, considered as a loan, and would probably die before reaching the ripe old age of 100.

Whichever way one looks at the figures, even if one reduces the amount spent, say on consumption for the first ten years of life, *see figures below, the Welfare State is affordible not only in principle but in reality. Of course R500 is only an estimate — some people spend less others more. There’s also clothing and shelter to consider. The repayment of VAT spent on food alone over the course of ones lifetime does not half compensate you for the initial loans made to big government.

Ask yourself the question: how much is my personal contribution to the state’s coffers worth, ie. what would social welfare cost not just through direct income tax but via indirect taxation of goods and services ie VAT?

An impossible problem since one is always taxed, even if you receive a welfare cheque, that cheque gets taxed the minute you spend it.

South Africans are one of the most taxed nations on this planet yet receive very little in the form of social support. Think about the needy, isn’t it time we eliminated some of the worst forms of poverty such as begging? Or restored peoples dignity with the knowledge that each and every citizen is looked after, without race and class distinction, all taken care of without exception?

By demanding a direct payment of welfare in your hour of need, you will not only destroy the lie that you don’t deserve such a payment, but the illusion that this kind of money does not exist. Call your MEC, phone your political party, campaign for a welfare state that meets the needs of all its people.

(* a simple guess-timate based upon an average life expectancy of 40 years, x est R6000 pa spent on food, ie R500 per month = R240 000 spent in total, that includes a startling R33 600 or 14 % VAT handed over to government in the form of indirect taxation.)

For more proposals for a better future, send a R100 cheque or money order and a self-addressed envelope to:

(Engineer of the Imagination)
PO Box 4398,
Cape Town 8000
South Africa

Or for a short pamphlet on overcoming the master-slave-worker state, R50 cheque or money order to the same address.

  1. I’m not an econmoist, and I can’t write long narratives like the one above, much less read them. However, if the Finance Minister were to refund VAT to poor people, where is he expected to source a replacement for this money? Bring back higher income tax on the middle classes, I suppose. (Please forgive me for being against this on the basis of personal interest).

    My understanding is that VAT is there to levy a fairly low tax on all the people in the informal sector who are not paying income tax. You know, Spaza shop owners and builders who work for cash.

    I would suggest that we keep the Vat as it is, and provide the Basic Income Grant and child support grants to needy people. (Note: genuinely needy people – not the con artists and government officials who are lining their pockets by faking the claims!)

  2. Of course you’re middle class Lets face it, the South African government wouldn’t be where it was today without taxing the poor. Whether you like it or not, even the lowest begger in the street ends up subsidising your middle class house, your middle class life, your middle class .

    Remove the illusion and lies created by a system that takes for granted the fact of taxation within a seemingly unlimited supply of consumers willing to fork out their 14 percent to subsidise the military, willing to spend billions on dirty nuclear energy, millions on covert operations against its own people, thousands on simply accomodating the wishes of foreign governments and jobseekers from abroad, hundreds on the myth of proudly south african products made in china, and so it goes.

    What do you say to a begger in the street? Sorry but the system doesn’t work for you, because I’m middle class? Fuck the middle class, eat the rich because thats what you deserve.

  3. While many would agree that the current system totally sucks (one only needs to look at what we’re doing to the planet to realise that), what is the alternative ?

    It’s all very well outlining ideas for one aspect of the current status quo, but to encompass the whole is another story altogether.

    Complacency and greed are the enemies of any other system being introduced, as is human nature.

    Those that wish to be our leaders are usually deeply flawed by the very nature of wishing to be leaders – to tell other people how to live their lives. Institutions are built on top of the ideas of these leaders, making their ideas “concrete”. After that, turning back becomes all the more difficult.

    “Whether you like it or not, even the lowest begger in the street ends up subsidising your middle class house, your middle class life, your middle class arsehole.”

    It’s all too easy to get on your high horse and judge others when you have the education to express that judgement.

  4. It all comes down to how one thinks about tax and the degree to which one is obligated to support big government projects. Its not about giving money to the poor but alleviating the already existing burden. Of course you want to exploit the poor because that’s what you were taught at school. In fact exploiting poverty is part and parcel of liberal philosophy.

    PS: What we’ve lost in this country is the global commons — more on that later.

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