Key Highlights from Minister Tito Mboweni's Budget
Speech
The week building up to Minister Tito Mboweni's budget
speech was filled with rumours about an increase in the VAT rate
and a new proposed wealth tax on assets. This time round sanity
prevailed and Mr. Mboweni passed a major test in very difficult
economic circumstances. This article will briefly touch on why the
non-introduction of the above-mentioned taxes is a good thing and
discuss the key highlights from Mr. Mboweni's speech.
Value Added Tax
VAT is a tax on consumption which means that the majority of
households in the country would have been adversely affected by an
increase in the VAT rate. This is often classified as a
"regressive"-tax, being a tax that will negatively impact
lower income households proportionally more than high income
households. In a country where inequality is a massive issue, the
introduction of a further increase on the VAT rate would have been
a very controversial.
