VAT increase is the least of Minister Gigabyte's worries

Malusi Gigaba will go down in history as the first person in the democratic era to bump up taxation on goods and services under the ANC government – but that is the least of his worries.

As controversy continues to swirl around him, Gigaba announced a one-percentage-point increase in Value Added Tax in the 2018 Budget on Wednesday in order to raise revenue to fund government’s spending needs. Raising the cost of living for all households is a hard sell at the best of times. For a scandal-fatigued and already hard-pressed nation, the last thing to demand is that consumers dig deeper to finance former president Jacob Zuma’s disastrous legacy.

Apart from the drain on public resources and crippling state-owned enterprises, Zuma had bequeathed the new government the burden of funding his fee-free education plan, which was hastily announced in December without proper consultation with the National Treasury. With tax collection undershot by R48.2-billion, options for raising revenue were limited.

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