BUDGET SHORTFALL
Treasury and MPs on collision course over VAT hike
Some of the ANC committee members have proposed that the increase should only be applicable for one year
Treasury and members of parliament’s finance committee are set on a collision course over the VAT increase, with some MPs insisting that a time limit should be imposed on the additional tax. Some of the ANC committee members have proposed that the increase should only be applicable for one year, while committee chair Yunus Carrim suggested during a committee meeting on Tuesday that the law should stipulate that a review of the necessity for the hike be undertaken after a specified period. "This [increase] can’t be here forever," Carrim insisted. The rise in VAT from 14%to 15% was announced in the February budget and took effect from April 1. It is expected to raise R23bn annually and was necessary to fill a huge gap of R48bn in revenue collection in 2017. "The committee at this stage, unless it is presented with a convincing argument by the executive otherwise, believes that there must be a time frame on the VAT increase," Carrim told the meeting. "We take into account that there ar...
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