TAXATION
VAT hike on the cards, but it won’t be easy for Gigaba
A political backlash is likely if Finance Minister Malusi Gigaba raises VAT
With the budget deficit projected to widen from 3.1% to 4.3% of GDP in the current fiscal year and tax revenue expected to fall R50.8bn short of earlier estimates, the Treasury is gripped by the challenge of finding new income streams. Many citizens believe, or fear, it will find them by raising taxes. The Treasury has a difficult task. Growth for 2017 is projected below 1%, while growth for 2018 is expected to be a paltry 1.1%, according to the World Bank. Although there is more than a month to prepare the 2018 budget, speculation on how Finance Minister Malusi Gigaba will raise additional tax revenue is already rife. In addition to a shortfall, according to the South African Revenue Service (SARS) and the Treasury, returns from personal income tax have dwindled with the slowing of the economy. SARS head of revenue and research Randall Carolissen says this is the impact of a very slow economy. "Our personal income tax was extremely buoyant but that has taken a back seat because bus...
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