A 2% increase in VAT would hit poor people the hardest although the undelivered Budget 2025 added some foods to the zero-rated basket.
A 2% increase in VAT would hit poor people the hardest, although the undelivered Budget 2025 added some foods to the zero-rated basket.The decision to announce in Budget 2025 that VAT will be increased by 2% was clearly not made by someone who knows what it is to be hungry, as the VAT concessions, such as zero-rating meat, will not put more food on the plates of poor and low-income consumers.
However, Abrahams points out that there were no concessions for other items and services poor people must pay for, such as electricity, shoes and transport that they need to survive. “Instead of helping the poor, this VAT increase would simply continue intergenerational poverty.”In January, the VAT on the basket was R331.02. With a 2% increase, it would have been R44.14 more, coming in at R375.16. Although R44.
“We do welcome the expansion of the VAT-exempt basket. However, some of the food items in the zero-rated food basket are not exactly the items that poor people always buy. Poor people already stopped buying red meat long ago because it is too expensive.
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