Concern over possible VAT hike in Gigaba’s budget

THE possibility of a hike in value added tax has been revealed as a major concern of opposition parties and civil society ahead of Finance Minister Malusi Gigaba’s budget speech today.

A revenue shortfall of more than R50-billion‚ announced by Gigaba last year‚ has raised fears that the country’s poor may bear the brunt of the South African Revenue Services’ poor tax collection rate.

UDM leader Bantu Holomisa said there were more demands on the budget than the state coffers could cater for.

“The pressing issues‚ like bailing out SOEs‚ may necessitate an increase in tax‚ even VAT for that matter,” he said.

“That’s the main worry‚ if they increase VAT it’s going to hit everybody [including] the poor.”

African People’s Movement leader Themba Godi‚ who chairs parliament’s standing committee on public accounts‚ said he was expecting an investigation into whether the state was not leaking money at SARS‚ the main revenue collection arm.

“I am just hoping that the word privatisation does not feature because one cannot rule out an attempt to sell off some assets as an attempt to raise immediate cash‚” he said.

The DA’s Alf Lees said his party would reject any tax increases by Gigaba, including the likely removal of zero rating on fuel.

“We specifically reject any talk of a VAT increase‚ which will hit the poorest hard.”

Corruption Watch executive director David Lewis said Gigaba had to elaborate and follow through on the president’s plan to clean up SARS.

“One of the greatest constraints our budget faces is in the decline of the revenue collection‚” he said.