BUSINESS NEWS - While consumers are asked to tighten their belts with the latest increase in value added tax (VAT), the South African Revenue Service (Sars) says the long-term economic gains will benefit South Africans.
The 1% increase from 14% to 15% kicked in on 1 April.
This is the first hike in 25 years.
The increase in VAT will cause consumers to dig deeper into their pockets as taxable goods and services will cost 8% more.
According to the National Agricultural Marketing Council, a basic 28-item food basket will cost consumers over R800. Twelve of these items are not zero rated, meaning they’re subject to VAT.
Last week, Finance Minister Nhlanhla Nene ordered a review of zero rated items. However, Sars says this decision is only likely to be processed in Parliament after July.
Sars: VAT hike to benefit South Africans in long-term
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