ANC wants to soften impact of higher VAT on poor
South Africa's ruling African National Congress (ANC) said on Sunday that it wants to alleviate the impact on the poor of an increase in value-added tax by adding more zero-rated and tax-free items.
ANC Secretary General Ace Magashule said in televised remarks the party would look at a range of measures to alleviate any negative consequences for the poor, including increases to the number of zero-rated and tax-exempted items.
The VAT increase, the first in 25 years, has raised concern over its effects on the poor from labour unions and civil society. It is likely to prove unpopular, with a national election due next year.
Finance Minister Malusi Gigaba announced on Wednesday the Treasury was taking the politically risky step of raising VAT to 15% from 14% starting in April, as part of its efforts to cut the deficit and stabilise debt.
The move is expected to generate an additional R23-billion ($2-billion) of revenue in 2018/19.
Magashule also said that party officials on Monday could discuss the issue of cabinet appointments under new President Cyril Ramaphosa.
"We don't have an agenda tomorrow - it's a normal officials' meeting. If it comes it will be part of our discussions," Magashule said in response to questions.
Ramaphosa, who was sworn in ten days ago after his scandal-plagued predecessor Jacob Zuma stepped down, said on Tuesday he planned to take the lifestyles of future government officials into consideration as he put together a new cabinet.
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