With the South African Revenue Service (SARS) collecting nearly R10 billion more than expected, economist Dawie Roodt believes a 0.5 percentage point increase in value-added tax (VAT) is unnecessary.
The proposed VAT hike is expected to be a key point of contention in Wednesday’s parliamentary vote on Finance Minister Enoch Godongwana’s national budget.
Roodt highlighted SARS’s recent success in ensuring greater compliance among personal income taxpayers.
“Unfortunately, we have a very efficient SARS that continues to collect taxes, only for the funds to be handed over to politicians to spend—often to the detriment of the South African economy. Credit to SARS for running a tight ship and doing an excellent job in tax collection, but in the end, it’s the economy and most taxpayers that bear the brunt,” he said.
