Trade unions and NGO’s have continued to push back against the implementation of VAT, saying it will severely hurt the poorest of the poor.
They suggested that it is either scrapped altogether or a moratorium be placed on its implementation until proper consultations with all other stakeholders is completed.
Trade Unions and NGO’s told lawmakers that these tax hikes are the most retrogressive ever imposed by the government.
But the Treasury says studies shows otherwise.
Director of Personal Income Tax & Savings Chris Axelson says, “All the research that we do shows that VAT will have the least impact, the revenues are coming.”
The Treasury says failure to adjust taxes in order to plug revenue shortfall will lead to lower growth, higher interest rates, higher inflation and lower rates of employment.
The Treasury says further hikes in corporate tax will scare investors, and that the increases are necessary to reverse the current unsustainable fiscal trends.
However, they promised to set-up a panel of experts to expedite increasing the number of zero-rated items and other measures to protect the poor and the working class.
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