Punch-drunk consumers should brace themselves for a VAT hike
Despite politics, South Africa’s government probably has no choice but to hike the VAT (Value Added Tax) rate to 16% in its 2020 Budget on 26 February, according to Absa.
Treasury increased the VAT rate to 15% (from 14%) on 31 March 2018.
Consumers will almost certainly also have to contend with yet another hike in the fuel levy.
In our forecast, we have assumed that the government will raise the general fuel levy by 30 cents/litre. But more importantly, we expect the government to increase the VAT rate by 1 percentage point to 16% in the 2020 Budget…Absa
… Our call of a VAT hike is perhaps a bold one, given the likely political fallout, but it is difficult to see what other options the government has…Absa
On the positive side, the bank expects the ongoing rehabilitation of the South African Revenue Service (Sars) to boost revenues in the longer term.
For more detail, read “Absa warns that the government may have to hike VAT” [Business Day] and “Shock tax hike coming for South Africans in April, economists warn” [BusinessTech].
Wealth builder Warren Ingram on how the new budget affects you.Read More
Spur releases results saying it plans to open 11 outlets in SA and 17 internationally in the second half of the year.Read More
Massmart has withheld their dividend as it swings to a R1.3bn lossRead More
''Government is speaking with forked tongue and Budget 2020 came as a shock''. Unions want to fight planned wage cuts.Read More
Eskom temporarily cut power to the rail agency in the Western Cape because of an over-due payment. It says Prasa has now paid up.Read More
What will happen if the IOC pulls the plug on the Tokyo Olympics? Pippa Hudson interviews sports scientist Dr Ross Tucker.Read More
Dennis Dykes (economic adviser for Nedbank) looks at the key positives and negatives of #Budget2020.Read More
"It’s now all predicated on saving R160bn in public sector wages. Are we going to keep to our promises?" asks Judge Dennis Davis.Read More
Sars Commissioner Edward Kieswetter discusses #Budget2020 changes to our tax system.Read More