Education Ambassadors SA

GRADUATE TAX: AN UNNECESSARY BURDEN

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Writer: Xolile Charles Mphokela

It was with dismay and disappointment to learn about the announcement of a proposed graduate tax. The ANC’s Mangaung conference suggested five areas of future taxation, including “progressive and redistributive taxation” through which the ANC could ensure “bold forms of state intervention”, according to resolutions. Such a move (graduate tax) might as well be equated to sin taxes, in a sense that graduates will have to ‘pay’ to graduate, pay as you earn tax and not forgetting our repayment to NSFAS (National Student Financial Aid Scheme). This is unlikely to solve social ills that continue to demoralize our country like a plague. Such a tax would ensure that the poor and marginalized never break the cycle of poverty.

Current students and those who wish to pursue their careers through higher education institutions should call for broader public consultation.  This goes against the wishes of the youth of 1976, who took to the streets to redress the exploitation that was further to suppress them by being taught in a language they couldn’t comprehend.  This type of tax could lead to students from entering tertiary level. Many students are still struggling to pay off student loans, which amount to R3bn in 2009 and had since risen over the past years. Government is supposed to be rewarding and grooming people who are to make an impact in the economy, not imposing tax without consulting and debating the matter.

Taxation or finance schemes which attempt to extract significantly higher contributions from middle and high earners can easily become counter-productive and result in lower overall revenue.  The prospect of incurring a tax liability would undoubtedly create students to seek an education from outside of South Africa. It is far from clear whether graduate tax revenues could be ring-fenced for investment in higher education.  It can be problematic even to define what is meant by ‘a graduate’.  The term could include people with achieving a range of higher qualifications, obtained on a part-time or full-time basis, over anything from one year to five years, or even longer.

This graduate tax system offers little or no benefit for low-earning graduates; in fact students will pay more in this scheme than in many fees and loan regimes. The tax goes against our very rights which are enshrined in our constitution. It practically enslaves us and leads to us living in perpetual servitude.

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