‘Not enough’ being done to soften VAT hike blow
An economic justice group that advocates for
affordable food believes the government's efforts to soften the blow of the
value-added tax increase are simply not enough.
In his budget last week, Finance Minister Enoch Godongwana announced that VAT will increase by one percentage point to 16% over the next two years.
At the same time, the list of VAT-zero-rated foods, such as poultry and canned goods, has been expanded to cushion vulnerable households.
Mervyn Abrahams, from the Pietermaritzburg Economic Justice and Dignity Group, said the increase will have a huge impact on consumers.
READ: NERSA approves electricity tariff hikes
"Zero-rating of few foods will not cover that because it won't cover the increase in electricity.
"So, when we look at electricity, a 0.5% VAT increase, as well as the 12.7% increase, will mean that 350 kilowatts of prepaid electricity will increase by R115,18c," said Abrahams.
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