VAT Increase, a solution or just a short-term fix to a long-term crisis?

System Administrator

The South African government has once again turned to taxation as a means of addressing its fiscal challenges, announcing an increase in the value-added tax (VAT) rate by half a percentage point in 2025/26 and another half a percentage point in 2026/27, bringing the final rate to 16%. This decision, though justified as necessary to fund critical social services, is yet another indication that the economy is caught in a self-perpetuating cycle of stagnation, increasing public debt, and over-reliance on a shrinking tax base. The key question we must ask is whether this increase is asustainable solution or merely a stopgap measure that exacerbates deeper economic challenges. A shrinking tax base and limited options The government has defended its decision to raise VAT by arguing that alternative revenue-raising measures, such…

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Star South Africa (Digital) - 1 Issue, 2025-03-14

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