‘Increase in Value-Added Tax will affect poorest South Africans’

The Pietermaritzburg Economic Justice and Dignity Group has warned that an increase in Value-Added Tax (VAT) would affect the poorest South Africans the most.

This comes amid speculation that National Treasury is considering increasing VAT to fund the R350 Social Relief of Distress grant.

According to the group, a basic basket of 44 items that currently costs just over R5000 could increase by six per cent based on the proposed increase.

The group’s Programme Co-ordinator, Mervyn Abrahams, “This will include things like maize meal and bread , cooking oil and a little bit of chicken and potatoes and onions. Now, we would see that the VAT of this basket is already 6.1% of the total household food basket of about R5155.

To increase the value added tax on that foods would mean that in actual fact, households would have less money.”

In June, the South African Revenue Service (SARS) Commissioner Edward Kieswetter said data-driven insights are helping to increase value-added tax revenue collection in the country.

He stated that the VAT helped to deliver R41 billion in tax revenue in 2022.