First Take SA

Economists say there is no more room for VAT increases


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Alliance partners expect newly appointed Finance Minister, Tito Mboweni, to not only give substance to the economic stimulus package announced by President Cyril Ramaphosa -- but also to boost confidence in the economy. The country entered a technical recession, plunging an already stagnant economy into deeper trouble. The former governor of the Reserve Bank will have his work cut out, as he navigates the tough economic challenges. Meanwhile, economists expect Finance Minister to make some announcements on expenditure rather than tax increases when he delivers the mid-term budget. Economists say there is no more room for VAT increases. Also revenue collection needs to be more efficient by increasing tax compliance measures and fixing tax administration and governance challenges at SARS. Tsepiso Makwetla spoke to political economist and senior research fellow at Trade Collective, Lebohang Pheko
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