VAT has been a cornerstone of South Africa’s tax system since its introduction in 1991, replacing the flawed General Sales Tax. Initially set at 10%, it sparked fierce opposition, culminating in a mass strike on 4 and 5 November, when an estimated 3.5 million COSATU workers protested against what they saw as an unfair burden on the poor.
A VAT hike to 17% now seems unlikely. That is because, on Wednesday last week, Finance Minister Enoch Godongwana was forced to postpone his Budget Speech after his proposal to raise VAT by two percentage points met immediate resistance.
Source: OurLongWalk
