Civil society bodies demand halt to VAT hike
The groups say the proposed increase will worsen already unacceptably high levels of poverty and inequality
Civil society bodies have called on Parliament to halt the proposed increase in value-added tax (VAT) saying such a move would make the tax regime more regressive and worsen already unacceptably high levels of poverty and inequality. In his budget speech last week Finance Minister Malusi Gigaba announced a one percentage point hike in VAT to 15%. Civil society groups including Section 27, Institute of Economic Justice, Public Service Accountability Monitor, and Studies in Poverty and Inequality Institute, said a reconsideration of the tax regime was not to be taken lightly and therefore not something National Treasury could unilaterally decide on. "Such decisions can be made only after their potential effects, particularly for the most vulnerable, have been assessed and exhaustively debated, and where the proposed changes are shown to be in the interest of a more equal society." They said the use of VAT as a major source of revenue was acceptable only if accompanied by measures to l...
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