#Budget2018

What does it take to reject a VAT increase in the budget?

Since the announcement of a 1% increase on VAT in last weeks budget speech, there has been movement to prevent this from happening.

This is because of the negative effects it will have, particularly on lower income families.

DA leader Mmusi Maimane has started a petition against the increase, so too has Amandla.mobi, but is this enough to stop the increase?

READ: ‘A tough Budget is a good Budget. We need a VAT increase’

Leon Louw, executive director and co-founder at Freedom Market Foundation says that when it comes to the proposed VAT increase, Parliament is not obligated to accept it as is.

It is a law like any other and in theory Parliament can deal with it in the same way and it can be amended.

Leon Louw, Executive Director and Co-founder at Freedom Market Foundation

There some differences with the budget which are a matter of tradition, not so much law... that is the budget almost always goes through in precisely the way they were tabled, with some relatively small tweaks.

Leon Louw, Executive Director and Co-founder at Freedom Market Foundation

Louw says it usual and rare for anything to be changed. He add that the actual budget, not the speech is a document that is around 600 pages, and that it needs to fulfill the government's debts and liabilities.

When it comes to this budget, Louw says that we are in an usual year politically.

Not only did Ramaphosa replace Zuma, more importantly, the budget is a Zuma budget. The budget was drawn up over the recent months and reflects virtually nothing of Ramaphosa what so ever.

Leon Louw, Executive Director and Co-founder at Freedom Market Foundation

There is a possibility of some change, but I think its grand standing to say that VAT should not increase. I don't think the DA or anyone seriously believed they will stop it.

Leon Louw, Executive Director and Co-founder at Freedom Market Foundation

Louw says the petitions against the VAT increase just create a climate of public opinion which may have some consequences in the future.

Listen to the full conversation:


This article first appeared on CapeTalk : What does it take to reject a VAT increase in the budget?


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