VAT increase will affect poor households - PACSA

VAT increase will affect poor households - PACSA

The Pietermaritzburg Agency for Community Social Action has criticised the 2018 budget saying it isn't a budget for the people.

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"South Africa is going through a very difficult financial period. However, in light of this troubling and difficult time that we are going through - increasing VAT by 1% will have a very negative impact on poor households," the group's Mervyn Abrahams says. 

Abrahams has been reacting to Finance Minister Malusi Gigaba's budget speech in Parliament yesterday.  

Gigaba announced that VAT would increase from 14 to 15% in April - making it the first adjustment in 25 years.  

Abrahams says the hike, together with a 52-cents per litre increase in the fuel levy will have a major impact on the country's poor.

"We track 36 foods in the packs of food price barometer and the increase in the 1% in  VAT - 14 to 15% will increase the food basket by R221,59 per month.  That has to be seen in comparison to the child support grant - which will only be increased by R30 and the old age pension only by R100," he says. 

Free higher education and the water crisis were given a big slice of the pie. 

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