Treasury explains VAT increase for average consumer

Treasury explains VAT increase for average consumer

Treasury says the one percentage point increase in Value Added Tax is not as severe as consumers and political parties are making it out to be. 

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The VAT rate hike to 15% was announced in last week's budget speech. It had been at 14% for more than 20 years. 

The decision has been criticised by some who say the poor are being used to recoup the millions misspent during the previous administration.

Deputy Director for Public Finance at Treasury, Mampho Modise fielded questions from UKZN students today about government's decision to hike the VAT rate.

Modise has told them the increase needs to be calculated against the goods we buy.

ALSO READ: VAT increase will affect poor households - PACSA

"It's R1 of R100. It's R10 of a R1000. It's R100 of R10 000. I know when you hear that - your heart stops," she says. 

The DA has started a petition against the increase while trade union federation, SAFTU is planning protests after rejecting the VAT hike.

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