Sasco wants an education tax

Although the resolutions did not elaborate on when and how the tax would be levied, the party wants to use it to sustain and restructure the National Student Financial Aid Scheme, which provides study loans to poor students.

But this has angered Sasco, which condemned it as exploitative and something that would reinforce the cycle of poverty in families with graduates who were often the first to attend university.

ANC spokesman Jackson Mthembu said last Friday (15 February) the resolution was not a firm recommendation, but an agreement by the party's education sub-committee to be considered in future.

Sasco wants the idea to be scrapped in favour of an education tax.

"We have called for an education tax, which was unanimously agreed upon at the ANC conference [and] requires business and the rich to contribute towards education in our country," it said.

"South African business benefits from the products of our institutions of higher education and training. However, they are not expected to contribute to an education tax which will contribute to financing free, quality education," Saco claimed.

Sasco was also party to the Mangaung discussions by the sub-committee headed by Home Affairs Minister Naledi Pandor. Sasco's president, Ngoako Selamolela, they objected to the resolution, proposing the education tax instead. The committee opted to consider a tax on graduates.

He said Sasco was conducting a study that would deliver firm figures in support of the education tax.

Business Unity SA said the education tax issue had not come up for review in its policy committee.

"We came out strongly last year in support of the youth wage subsidy, which Sasco is against," said Vanessa Phala, director of policy at the lobby body.

The Treasury budgeted for the subsidy almost three years ago but it has continued to be blocked by labour federation Cosatu amid fears that it could encourage employers to get rid of older workers.

"Companies pay 1% of their payroll to SARS, which amounts to billions annually," said Phala. "Some 20% of this money is paid to the National Skills Fund to support students in financial need, 80% of the money is paid to Sectoral Education and Training Authorities for targeted training interventions. So the private sector does play a huge role in education and training."

Neren Rau, chief executive of the South African Chamber of Commerce and Industry, said both suggestions were ridiculous.

"[They] show a lack of understanding of the challenges that face our economy," Rau said. "If South Africa is to compete in the global knowledge economy, it needs to provide incentives for further education, not penalise it. Graduates already pay higher taxes if they earn more," Rau said.

Source: Sunday Times via I-Net Bridge