Budget postponement opens door for tax alternatives, says IEJ
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GUEST – Liso Mdutyana - Budget and Tax Policy Researcher at the Institute for Economic Justice
The proposed two percentage point VAT increase has sparked debate about priorities in the National Budget, the stability of the Government of National Unity (GNU), and raised important questions about how South Africa can raise revenue to support its developmental goals.
While the tabling of the budget has now been delayed, the IEJ has analyzed the scrapped budget documents to understand how the National Treasury was planning to resource strategic priorities in the Medium-Term Development Plan (MTDP). It is important to go beyond the rejected VAT increase and unpack how the National Treasury understands the economic outlook, and the assumptions that underlie it, and propose measures to raise revenue that are not as harmful as a VAT hike.
The proposed two percentage point VAT increase has sparked debate about priorities in the National Budget, the stability of the Government of National Unity (GNU), and raised important questions about how South Africa can raise revenue to support its developmental goals.
While the tabling of the budget has now been delayed, the IEJ has analyzed the scrapped budget documents to understand how the National Treasury was planning to resource strategic priorities in the Medium-Term Development Plan (MTDP). It is important to go beyond the rejected VAT increase and unpack how the National Treasury understands the economic outlook, and the assumptions that underlie it, and propose measures to raise revenue that are not as harmful as a VAT hike.