Value-added tax increases to 15%, a first since 1993

Value-added tax increases to 15%, a first since 1993

The Finance Minister has announced a number of proposed tax increases - including VAT. 

Gigaba Parliament
Parliament RSA

"An increase in the value added tax rate from 14 to 15%, a below inflation increase in the personal income tax rebate bracket with greater relief for those in the lower income bracket. A 52-cent per litre increase in the levels of fuel and increases in the alcohol and tobacco excise duties between 6 and 10%," he says. 

Tabling budget in parliament, Finance Minister Malusi Gigaba presented the budget in the National Assembly. 

Gigaba says the VAT rate has remained the same since 1993.

"It is low compared to some of our peers such as Argentina, Morroco, Turkey and Kenya. We therefore decided that increasing VAT was unavoidable if we are to maintain the integrity of our public finances," he says.

Other tax proposals include an increase to 9% in excise duties on luxury goods and an estate duty of 25% on estates of over R30 million.

In addition - alcohol and tobacco excise duties will be increasing between 6 and 10%. There will be an increase of 8,5% for tobacco products.   

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