Skip to main content

Increase in VAT off the table

| Economic factors

While the easiest way for the government to collect the revenue it needs is to raise value-added tax (VAT), this is not on the cards for political reasons, says Judge Dennis Davis, chairman of the tax advisory committee.

Finance Minister Pravin Gordhan has said the government has to raise an additional R28bn in tax to meet fiscal targets over the medium term.

The new tax measures will be announced in February.

Davis was speaking at an Investec panel discussion in Johannesburg.

He said the best options to raise new revenue were: raising the tax rate to 45% for the highest earners; clamping down on base erosion and transfer pricing by companies; and through the exchange control amnesty.

It was possible that the skills development levy would be raised a percentage point to 2% to help fund increased funding to higher education.

Higher corporate taxes were also not an option due to the risk of dampening investment.

Pin It

Related Articles

By: Mandilakhe Tshwete - IOL South African consumers may face higher meat prices this winter as outbreaks of foot-and-mouth disease, an avian flu-related ban on Brazilian poultry imports, and financial turmoil in the local poultry sector tighten su…
By: Mandilakhe Tshwete – IOL Business Spaza shops across the country are under scrutiny following a growing number of consumer complaints about unauthorised surcharges added to purchases made using bank cards.
The Beer Association of South Africa (BASA) acknowledges the 2025 Budget Speech delivered during the Budget 3.0 update.
By Gavin Kelly  - CEO of the Road Freight Association The Road Freight Association (RFA) notes the decision by the Minister of Finance to increase the fuel levy by 4% (petrol 16 cents and diesel 15c a litre).
By: Se-Anne Rall - IOL Finance Minister Enoch Godongwana is confident he has charmed his way into the hearts of Parliamentarians and the nation following the delivery of his Budget Speech at the Cape Town ICC on Wednesday (21/05/2025).