CAPE TOWN: South Africa is to increase its value added tax (VAT) for the first time in 25 years in order to help bridge a gap in the government’s budget.South Africa’s VAT, which has remained constant since 1993, will increase to 15 percent from 14 percent as of April 1 this year.
Last week saw momentous political change in Africa’s most developed economy as Ramaphosa took over as president following former President Jacob Zuma’s resignation. Ramaphosa is viewed favourably by the business community, not least for his pledge to fight the corruption that plagued Zuma’s administration of which Zuma denies wrongdoing.South Africa’s Treasury intends for its consolidated deficit to fall to 3.5 percent of GDP by the fiscal year of 2020/21. It also revised its projection of GDP growth for 2017 to 1 percent, up from the previous 0.7 percent figure.This is part of the Treasury’s attempt to shrink its budget deficit, which stands at 4.3 percent of gross domestic product (GDP) in the 2017/18 fiscal year.
