Budget speech 2017 - Your taxes could rise

Budget speech 2017 - Your taxes could rise

Tax experts believe Finance minister Pravin Gordhan could look at an increase in tax to fund the country's R28-billion revenue shortfall.

Pravin Gordhan
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Tax Consultant Tertius Troost, says an increase in value added tax (VAT) is probably one of the most reasonable changes Treasury could impose.


Troost suggests VAT be increased, as it's remained unchanged for some time. 

He says it is also the quickest and fairest way to fund the shortfall. 

READ ALSO: 'Gordhan must prioritise education, employment'


National head of taxation services at Mazars, Mike Teuchert  supports this view. 


He says a 1% increase in VAT will result in R20billion, which makes up more than half the shortfall.


"This is a possible avenue that can be explored, but politically it is not a popular tax. In addition, it has a worse effect on the poor," Teuchert says. 

"Tactically what the minister could do is announce a 2% increase VAT rate and then negotiate down." he adds. 


Last year, Gordhan announced the country needed to raise R30bn over the next two years. 

 He later revised this number to R43 billion. 


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