Budget 2021

WATCH: Why Gordhan won't raise VAT

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Siphamandla Mkhwanazi, Standard Bank economist.
Siphamandla Mkhwanazi, Standard Bank economist.

Johannesburg –  Raising the VAT rate could help Finance Minister Pravin Gordhan raise the R28bn tax revenue required to narrow the budget deficit, however it is unlikely he will use this option, said an economist.

Siphamandla Mkhwanazi, economist at Standard Bank, shared insights on the National Budget, to be delivered on Wednesday. He highlighted areas in which tax increases are expected.

Mkhwanazi said that although a VAT hike could generate the most revenue, it would exert pressure on low income consumers who are already under strain.

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