VAT hike reversal relief for business: Cape Chamber

A VAT graphic with a shopping trolley and a calculator.

1 minute

The Cape Chamber of Commerce and Industry (CCAI) says the decision not to increase Value Added Tax (VAT) by 0.5 % point is a relief not only for the poor but also for business.

VAT will remain at 15%.

CCAI says government will have to curb its expenditure to make-up for the deficit in the medium term.

It’s suggested reducing the size of the Cabinet and spending on public service salaries will help make up the deficit.

The Chamber’s Deputy President Derryn Brigg says it is a positive step for South Africa’s economy and a huge relief for already over-burdened consumers.

Brigg says, “The VAT hike would’ve had a massive impact on households which are already under pressure and obviously as input VAT increases, prices increase. It has a negative impact on spending and consumer households drops. It literally means that families can’t afford food and essential items and that pushes more people into poverty. It creates more malnutrition.”