Zuko Komisa
Growing concerns of a looming VAT tax increase
There are growing concerns that the South African government will soon increase the VAT tax – an indirect tax on the consumption of goods and services in the economy.
According to Economist Azar Jammine who spoke to ENCA the government may be forced to increase VAT.
According to him, the hike in interest rates has resulted in customers taking out more credit, and the government may be compelled to raise VAT.
“For the consumer experience in the coming months will get tighter, interest rate has risen nearly by 5% for the last two years and employment has not pick up and economic growth is becoming under pressure,”
“We see all the indicators that consumer spending is now starting to take strain,” says Jammine says.
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The last VAT increase was announced by The Minister of Finance from 14% to 15% effective 1 April 2018 in the 2018 Budget Speech.
In September Sunday Times reported that South African residents may soon face higher value-added tax (VAT) rates in order to maintain the R350 social relief of distress (SRD) subsidies.
This was shortly before a City Press story that the Department of Social Development had returned to the National Treasury more than R15 billion in SRD grant money after failing to spend the approved budget.
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