A hike in the value-added tax (VAT) rate would be less distorting for the macroeconomy should the government need additional funds in future\u201a than a rise in personal or corporate tax rates\u201a the Davis Tax Committee has concluded\u201a the newspaper reported.<\/p>\n
The committee\u2019s interim report on VAT\u201a which was submitted to Finance Minister Nhlanhla Nene in December\u201a was released on Tuesday for public comment.<\/p>\n
Trade unions and civil society organisations are likely to oppose suggestions that the VAT rate be increased because of the effect of this on the poor.<\/p>\n
The state would need significantly more tax revenue if and when it implements its national health insurance plan.<\/p>\n
The report said that if the VAT rate \u2014 currently 14% \u2014 were raised for this or any other reason\u201a the poor would have to be compensated\u201a possibly by increases in social grants or with a better school nutrition programme.<\/p>\n
Taxes eat away at disposable income: index<\/a><\/strong><\/p>\n Do we pay too much income tax in South Africa?<\/a><\/strong><\/p>\n