Low income earners such as miners are set to be the most affected by the recently announced Value Added Tax (VAT) increment that’s set for April 2018.

In the annual budget speech that he made while he was still the Minister of Finance, Malusi Gigaba announced an increment of VAT from 14 to 15 percent.

This is the first VAT increase in 25 years, and analysts believe the move is meant to raise money to fund the free higher education promised by Jacob Zuma in the dying days of his presidency.

Even though Gigaba announced that there will not be a VAT increase on zero-rated items such as maize meal‚ brown bread‚ dried beans, rice and other basic food stuff, some experts believe that more can be done to ensure that low income households are protected.

University of the Witwatersrand’s School of Business and Economic Sciences has called for an expanded list that will bring more relief.  According to the report, goods that should be added on the zero-VAT list include candles, soap, basic medicines, pay-as-you-go airtime and education-related goods.

If this VAT increment is meant to help students from poor backgrounds, the impact will be felt by the same families Zuma’s fee free education was meant to help.


27 February 2018 by Trust Matsilele