The Minister of Finance Enoch Godongwana has announced that a Value Added Tax (VAT) increase of 0.5 percentage points has been revoked. Godongwana made the announcement following careful evaluation of the parliamentary committees’ recommendations and lengthy discussions with political parties.
Economist Dawie Roodt said the decision to leave VAT unchanged, has no significant impact on the financial state of the economy.
“The country is in very deep trouble, and we need to stabilise our financial state, but a 0.5 percentage points increase of even a 1percentage point increase is not going to make any significant impact,” he stressed.
Roodt further emphasised that from a political point, Godongwana may be in trouble.
“The worry now is that the South African economy will grow at a slower pace, slower than what we expected and there is a good chance that the minister may be fired,” he shared.
