Finance minister Enoch Godongwana has said that failing to raise the value-added tax rate from May would cause severe harm to state finances.
This was stated in court papers in response to the DA’s challenge to the legality of the VAT hike.
Godongwana argued that any delay or removal of the VAT hike would have dire consequences for the country’s finances.
“If the rate increase is halted now, that revenue will be lost, and the state will be left without the funds needed to meet already-budgeted spending commitments,” Godongwana said in papers lodged on Wednesday.
“The consequences would be severe and far-reaching. Government would be immediately forced either to cut expenditure or to increase borrowing.”
Lawmakers have the power to amend or withdraw the impending VAT hike through upcoming budget votes.
[Image: Bonginkosi Tekane]