Low-income households will feel the pinch of VAT increase
It is going to be a rough ride for low-income households facing a marginal tax increase, but the argument for an overall increase in personal income taxes is losing favour. While there will be no adjustments to the top four income tax brackets, there will be below-inflation adjustments of 3.1% to the bottom three brackets. Treasury deputy-director general Ismail Momoniat explained that there were only three options: to increase value-added tax (VAT), personal income tax or corporate income tax. While an increase in corporate income tax was unfeasible based on international standards, Momoniat said personal income tax had already been increased dramatically and “is not giving us what it should”.