Tax on graduates discourages culture of learning

The tax on graduates, as announced this week by the Chair of the Subcommittee for Education, Naledi Pandor, is a one-sided decision that will not promote tertiary studies among South Africans, AfriForum Youth said. The youth organisation also demanded that broader public consultation be done before such a tax is instituted.

“In reality the tax system already exists, as South Africans are subject to a progressive tax structure where they have to pay 25%, 30%, 35%, 38% or 40% of their income to the State, depending on their level of income. South Africans with higher incomes already pay more tax,” says Danie Ungerer, spokesperson of AfriForum Youth.

The tax was first proposed at the Mangaung Conference in December last year. The ANC did not propose a time frame for implementation or any percentage or amount to be levied against such a person’s income.

“A degree does not automatically mean that you are able to afford additional taxes. The Census of 2011 shows that 69% of 21 year old graduates earn less than R6400 per month. Such a tax will also create a climate where young people are discouraged to further their studies. It can lead to even more graduates leaving the country. Government is supposed to reward people who make an impact on the economy and who have the ability to generate employment,” Ungerer said.

Ungerer added that if the purpose of the tax was to bolster the NSFAS bursary scheme, this was not the way to do it. Indirectly, graduates who received money from NSFAS, will have to repay loans by means of a special tax. NSFAS should do what all other bursary schemes do: recoup the money from the recipients themselves. If the idea is that students who do not receive money from NSFAS should repay the loans by means of a special tax, it is even more unacceptable.

AfriForum Youth will request the Subcommittee to open the process to public consultation.

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