Gigaba: We had no option but to increase VAT rate

Gigaba unveiled a R1.67 trillion budget on Wednesday, with an increase in VAT from 14% to 15%.

FILE: Finance Minister Malusi Gigaba at a briefing. Picture: AFP

JOHANNESBURG - Finance Minister Malusi Gigaba has defended Treasury's decision to increase value added tax (VAT), saying that it was long overdue with the country out of options.

Gigaba unveiled a R1.67 trillion budget on Wednesday, with an increase in VAT from 14% to 15%.

On Thursday morning, the minister is unpacking his budget at a post-Budget briefing in Cape Town.

Picture: EWn.

He says that his department took the decision to implement free higher education for the poor and working class to avoid another student protest.

Treasury will now hold back on some of its capital projects and reduce spending to find the R57 billion to fund education.

He says that students must understand that the money will come from taxpayers and that they must pass.

"We need to be very blunt because this is a lot of money. The people of South Africa are going to pay to educate our children. Like I say with my own children, that I'm spending a lot of money sending you to school, I want you to pass, I'm not giving you the option to fail," Gigaba said at the briefing.

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