South African government vows to ease people’s pain from VAT hike – Xinhua

JOHANNESBURG, Feb. 25 (Xinhua) — Faced with criticism from opposition parties over an increase in value-added-tax (VAT), South Africa’s ruling African National Congress (ANC) said on Sunday it will increase the list of zero-rated and tax-free items.

According to ANC Secretary General Ace Magashule, the increase in the list of zero-rated and tax-free items is meant to ameliorate the impact of a VAT hike on the poor.

Last week, the government raised the VAT for the first time in 25 years, ahead of elections in 2019.

Finance Minister Malusi Gigaba announced a 1 percentage point increase in VAT, from 14 percent to 15 percent.

The VAT hike and a plethora of other tax proposals were meant to generate an additional R36 billion (3.1 billion U.S dollars) in tax revenue, the minister said.

The South…

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