By Monique Vanek

(PRETORIA) For the first time since 1993 Treasury has decided to hike South Africa’s value-added tax (VAT) by one percentage point to close its revenue shortfall gap of R48.2bn in 2018.

In its Budget Review it said the decision was taken as it was estimated “to have the least detrimental effects on economic growth and employment over the medium term”. Also when compared to other countries it was among the lowest, unlike corporate tax (see graphs below).