ANC backed into a corner over VAT hike

Legislation giving effect to the increase in VAT from 14 to 15% was passed in the National Assembly on Tuesday afternoon after a fierce debate.

Picture: Supplied.

CAPE TOWN - The African National Congress (ANC) has been forced to back this year’s VAT hike while opposition parties slammed the move, blaming the ruling party for mismanaging the economy and state finances.

Legislation giving effect to the increase in VAT from 14 to 15% was passed in the National Assembly on Tuesday afternoon after a fierce debate which saw the ANC promising that the impact of the hike would be reviewed in 2021.

No one likes the VAT increase, not least the ANC. It’s argued the stagnant economy, a big revenue shortfall and having to fund fee-free higher education left the government with no option.

Finance committee chairperson and ANC Member of Parliament Yunus Carrim says: “Which majority party would increase VAT on the eve of an election? It was done because there was no other choice.”

Opposition parties climbed into the ANC.

The Inkatha Freedom Party’s Mkhuleko Hlengwa: “All these tax increases are brought to us by the ANC. Petrol increases by the ANC, VAT increases by the ANC, e-tolls by the ANC, bailouts by the ANC, corruption by the ANC and it is the taxpayer who is expected to foot the bill for the shortcomings of the ANC.”

The Economic Freedom Fighters rejected the hike, with Member of Parliament Mbuyiseni Ndlozi saying it was “shameful” and “a sad day” when the poor had to suffer for the ANC’s mismanagement of the economy, state looting and wasteful spending.

(Edited by Winnie Theletsane)