Vavi raises concerns over VAT increase

The General Secretary of labour union federation, SAFTU, Zwelinzima Vavi says the poor are being forced to pay for the mistakes of the political elites with today’s one percentage point increase in VAT.

Vavi says in a tweet that the increase will hit the poor hard with the price of many commodities increasing.

President Cyril Ramaphosa’s administration hiked VAT in an attempt to balance the books and avoid a ratings downgrade after what many analysts say were years of populist policies and maladministration.

Consumers are facing another blow with the implementation of the sugar tax which is aimed at improving the health of South Africans by reducing their sugar consumption.

Treasury is establishing an independent panel of experts to review the current list of vat zero-rated food items.

Consumers will be paying higher VAT, Fuel and Sugar taxes when tax increases kick in from Sunday the 1st of April.

The panel will consider expanding the list of basic food items that are VAT zero-rated, and also consider how specific expenditure programmes can be improved to better target poor and low-income households.

It will take public comments, convene hearings, and will engage with different stakeholders and all interested parties.

At the same, Debt rescue says it expects an increase in the number of people who will plunge into deeper into financial trouble as a result of these increases.

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