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Thread: VAT rate increase coming soon?

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    Site Caretaker Dave A's Avatar
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    VAT rate increase coming soon?

    Is it my imagination, or is the general public being prepped for a VAT rate increase sometime soon? There seems to be a lot of "speculative comment" that this might well be the best way to bridge the government's current budget gap between income and expenditure.

    Personally I'd prefer to see the government targeting increasing GDP as the solution...
    The trouble with opportunity is it normally comes dressed up as work.

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    Site Caretaker Dave A's Avatar
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    Pretty good write-up on the Davis Tax Committee's VAT report here.

    I still think it's the soft option to solving the problem, though.
    The trouble with opportunity is it normally comes dressed up as work.

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    Full Member Xplosiv's Avatar
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    I suppose it's too optimistic to think they'll actually cut on unnecessary expenditures?
    Like Nkandla, trains that aren't suitable for our tracks, golden handshakes, bonuses where they're not deserved (looking at you, ESKOM), to name just a few.
    Cut all the international "fact finding missions" and other ministerial trips that aren't essential. Couple that with aiming to increase GDP and you could probably lower VAT.

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    Gold Member vieome's Avatar
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    Goverment has already increased income tax this year decreasing peoples disposable income, and added to that electricity increases and fuel increases, I think if they increase VAT we are going to be headed to a serious strike season. Though I guess they might wait for Iran oil to bring down the fuel prices before introducing such a measure. I think it would be better to look what the percentage is of goverment wages vs GDP and reduce those expenses first.

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    An increase in the rate of VAT versus an increase in the income tax versus increase in indirect taxes. I hear what Dave is saying, but presently I believe that is beyond the scope of their imagination.

    So, lets see how we measure up against the rest of the world:
    Namibia and New Zealand are 15%
    Norway has 15% reduced VAT rate on foodstuffs and beverages, or else it is 25%
    United Kingdom 20%
    Belgium 21%
    Brazil 17% to 19% depending on state.
    France 20%
    Germany 19%
    Ireland (shame) 23%
    Italy 22%

    It's actually an eye opener to look at these numbers:
    http://www.vatlive.com/vat-rates/int...and-gst-rates/

    Regarding sin taxes, I for one gave up smoking this year, so they lost an absolute fortune from me! So that won't cut it either.

    For me there is an instant attraction towards the simplicity of VAT. I honestly won't mind.

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    Gold Member Chrisjan B's Avatar
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    Only if they lower or scrap other taxes.....

    BOVER Technologies
    - computer sales and TeamViewer support
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    Diamond Member tec0's Avatar
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    long story short we will see a +1% making it 15% but i suspect due to the massive losses the government has suffered it is possible to see a +2% making it 16% But it will not remain 14% for every long
    peace is a state of mind
    Disclaimer: everything written by me can be considered as fictional.

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    Diamond Member tec0's Avatar
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    Quote Originally Posted by CLIVE-TRIANGLE View Post
    Regarding sin taxes, I for one gave up smoking this year, so they lost an absolute fortune from me! So that won't cut it either.

    For me there is an instant attraction towards the simplicity of VAT. I honestly won't mind.
    peace is a state of mind
    Disclaimer: everything written by me can be considered as fictional.

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by CLIVE-TRIANGLE View Post
    It's actually an eye opener to look at these numbers:
    http://www.vatlive.com/vat-rates/int...and-gst-rates/
    Sure is.

    Canada - 5% to 15% depending on state.
    India - 12% to 15% depending on state
    Indonesia - 10%
    Korea - 10%
    China - default of 17%, but with massive reductions in a wide variety of sectors and activities (a good example of an incentivised structure?)
    The trouble with opportunity is it normally comes dressed up as work.

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    Quote Originally Posted by Dave A View Post
    Sure is.

    Canada - 5% to 15% depending on state.
    India - 12% to 15% depending on state
    Indonesia - 10%
    Korea - 10%
    China - default of 17%, but with massive reductions in a wide variety of sectors and activities (a good example of an incentivised structure?)
    I am certainly not arguing with you. I am suggesting that we are faced with a considerable increase in income tax, or a small increase in the VAT rate.

    That there are other more equitable strategies is a given; but the acumen and foresight is absent.

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