Godongwana: We Looked At Every Alternative To Vat Hike

Finance Minister Enoch Godongwana on Wednesday said the treasury had weighed every way of finding more revenue before staying on the route of a VAT increase, although a smaller one than proposed last month.

We thoroughly examined alternatives to raising the VAT rate, he told the National Assembly when he finally delivered his budget speech after a three-week delay.

Corporate tax collections have declined over the last few years, an indication of falling profits and a trading environment worsened by the logistics constraint and rising electricity costs.

There was also the fact that South Africas corporate income tax collections were already higher than that of most of its peer countries.

On the other hand, an increase to the personal income tax rate would reduce taxpayers incentives to work and save.