Growth slows, but higher VAT revenue hopes are high
Telecommunications industry reforms and boosting competition by lowering barriers to entry could give GDP leg up, economist says
Disappointing growth in the first quarter of 2018 has not damped expectations for higher VAT revenue at the South African Revenue Service, despite slower VAT collection in April. April is the month in which the new one percentage-point hike in VAT — the first in just over two decades — kicked in. VAT collection improved 6.2% to R21.4bn in April from a year earlier. The forecast is for R348.1bn for the year. On Wednesday, Standard Chartered chief economist for Africa and Middle East Razia Khan said the VAT hike "had not made that much impact" yet. Khan was addressing investors and media on the economy in Sandton, where she also said reform in the telecommunications industry and in market competition by lowering barriers of entry could add another one percentage point of GDP. She said that in other economies, globally efficient treatment of revenue from VAT had resulted in an automatic boost to growth, although this growth was transitory.
VAT is the second-largest contributor to...
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