Economists fear VAT could be hiked in February
Absa economist Peter Worthington believes Finance Minister Tito Mboweni is likely to increase Value-Added Tax (VAT) in his February budget speech.
Worthington was speaking at Absa's round-table discussion in Sandton on Tuesday on South Africa's economic prospects for 2020.
"We're making a little bit of a bold call that the government will hike VAT, because it doesn't have an awful lot more of options to raise revenues.
"It may decide to rely, once again on not completely on adjusting personal income tax expenditure brackets, but we run the risk in South Africa that if you rely on these measures to tax individuals more heavily, you will just damage the tax base," he said.
Should the government decide to increases VAT it will be the second time in two years.
In 2018, then finance minister Malusi Gigaba increased VAT to 15% from 14% - the first adjustment in 25 years.