The Organisation for Economic Co-operation and Development published a report this week that recommends South Africa increase VAT, keep the current Covid-19 relief grants, and cut corporate tax.
a report this week recommending South Africa raise VAT, keep the current Covid-19 relief grants, and cut corporate tax.
“For example, the allowances and deductions in personal income tax that tend to benefit high earners could be reduced while wealth transfer taxes and estate duties could be adapted to limit the transmission of wealth inequality.”“Once inflation has abated, there is room to raise the relatively low VAT rate, balancing that with increased transfers to low-income households,” it stated.
“Without a strong and sustained recovery, South Africa risks losing some of its hard-earned social progress in areas like education, housing, welfare and healthcare,” said OECD acting chief economist Álvaro Pereira. The report claims that South Africa’s R350 social relief grant that the government provided because of the Covid-19 pandemic has been crucial to many South Africans.
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