No guaranteed silver lining or benefits with VAT hike

Although it’s now over three decades since the democratic elections in South Africa, the country still battles with the triple challenge of unemployment, inequality and poverty. South Africa’s current weak economic growth and outlook present a very bleak future. South Africa has immediate pressures on infrastructure investments and job creation. In his budget speech, Minister Enoch Godongwana argues that tax hikes will contribute immensely to the planned R232.6 billion funding of key programmes. Minister Godongwana stated that “the funding is for spending pressures for infrastructure investments, social protection, a higher-than-anticipated public-service wage agreement, and provisional allocations for critical frontline services.” The current strategic focus of the National Treasury is on electricity, rail, water and transportation infrastructure projects. Such investments are projected to contribute immensely to the reduction of the cost…