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‘VAT increase will have the poor subsidising the rest of South Africa’
Lester Kiewit speaks with Mervyn Abrahams, Pietermaritzburg Economic Justice and Dignity Group
The state of the country’s finances is close to dire, and the finance minister could soon be announcing ways to save and cut spending.
Among some of the proposals tabled by Treasury is a VAT increase of 2 percent to secure more tax revenue.
This will drive up food prices, leaving the poorest of the poor struggling with food security.
RELATED: 'Govt interference in food pricing could lead to empty supermarket shelves'
Abrahams says that a VAT increase will disproportionately impact low-income people in our country and have less effect on those earning over R35 000 a month.
It will once again be the poor subsidising the rest of South Africa.
Mervyn Abrahams, Pietermaritzburg Economic Justice and Dignity Group
He adds that while some basic foods are exempted from VAT, the price of this food increases regardless so it does not keep this food affordable.
Listen to the interview above for more.
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