- Finance Minister Enoch Godongwana wants to raise VAT to fund the Social Relief of Distress (SRD) grant.
- He says the SRD grant was meant to be temporary.
- The government is now pushing for the grant to become permanent.
- The High Court ruled that the means test for the grant is too restrictive and the value of the grant is too low.
- The government is appealing the ruling.
- If the appeal is unsuccessful, the cost of the grant could increase significantly.
- The ANC has promised a basic income grant, which would be very expensive.
- The ANC has also promised free comprehensive universal healthcare, which would also be very expensive.
- Godongwana says a VAT hike is necessary to fund the SRD grant.
- The original plan was to hike VAT by two percentage points to 17%.
- This would have raised an additional R60 billion in 2025.
- The money would have been used to fund education and health.
- Other tax hikes would be necessary to fund the government’s promises.
Source: businesstech.co.za
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
