In order to help bridge a gap in the government budget, South Africa is to raise its Value Added Tax (VAT) for the first time in 25 years.
The Finance Minister Malusi Gigaba’s mentioned this as part of his first annual budget in South African Parliament Cape Town. This is the first speech under the current South African President Cyril Ramaphosa.
The goal of the Treasury is to shrink its budget deficit which is currently 4.3%. The VAT system has remained the same since 1993, this 15% percent increase from the previous 14% will take effect from April 1st, 2018.