VAT is going up on 1 April no matter what anyone does – simply because that's the way Parliament works
- The one percentage point increase in VAT is due to kick on on 1 April.
- Parliamentary procedure means it is nearly inevitable, even if the backlash to the decision were to dictate otherwise.
- Treasury stands by the increase, and those who oppose it will have to find R22.9 billion somewhere else.
The simple act of announcing the increase in value added tax (VAT) in the budget speech made it legally inevitable – no matter how much pressure civil society organisations and the opposition pile on the government.
The only legal way for Parliament to stop the increase would be by passing the Rates and Monetary Bill, Business Day reported Yunus Carrim, the chairperson of Parliament’s standing committee on finance, had said.
And hearings on that bill are only due to start on 18 April, nearly three weeks after the VAT increase becomes effective.
Meanwhile, plans to expand the basket of basic goods that are not subject to VAT will have to wait for the creation of a panel of experts, which will then investigate and report back, before the legal process can even begin.
See also: 18 days and counting until every till, every advertisement, and every tax system must be ready for the new VAT rate – with this one exception
Should Parliament ultimately reject the VAT increase, then it must find an alternative way to raise the R22.9 billion that hike will bring, Carrim has said.
The national treasury has staunchly defended the VAT increase as the least harmful way to close the budget shortfall.
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