According to Times Live, the proposed increase in VAT from 15% to 17% in South Africa could result in a R44 rise in VAT on a basic food basket, raising concerns about the financial strain on low-income households. Despite plans to expand the zero-rated food basket to include more protein, essential items like infant formula remain excluded, impacting families relying on child support grants. The budget speech was postponed to March 12 due to disagreements within the government, allowing for further public debate on the tax hike. Experts argue that zero-rating more food items does not fully protect the poor, as they still need to afford other essentials like electricity and school expenses. Additionally, potential price increases and administrative challenges could undermine the benefits of zero-rating. The Pietermaritzburg Economic Justice and Dignity group warns that the VAT hike would disproportionately affect the most vulnerable, leaving them with minimal financial relief despite proposed social grant increases.
Poll Question: How do you feel about the proposed VAT increase from 15% to 17% in South Africa?
