here is a massive gap in the country’s finances, to put it bluntly. South Africa has an R48-billion hole in the fiscus that needs to be filled, and part of Finance Minister Malusi Gigaba’s solution in last week’s 2018 Budget was to push up value-added tax (VAT) by one percentage point, to 15 percent, as of April 1, 2018. This is the first increase in VAT in 25 years.

But what does this increment mean to taxpayers? Will poor South Africans suffer even more, or is this the way for the fiscus to make up its financial shortfall, with the VAT increase affecting the rich the most, as government insists it will?

‘VAT affects everybody that spends money, rich and poor’

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“It was considered necessary to find the revenue elsewhere to contribute to the additional R36-billion which is needed. But VAT affects everybody who spends money, rich and poor.”