Publications
Partners
Cape Town - A call for consumers to avoid paying any VAT on Friday April 7 in order to show President Jacob Zuma the impact such a boycott would have on government income, has been doing the rounds on social media.
"Let's make April 7 a day on which the Zuma government earns no VAT," the statement - of unknown origin - read.
"Don't buy any commodities, any airtime, don't pay for any services, don't take a taxi, don't buy any tickets or petrol - don't even do any banking transactions."
"Government gets 14% on every transaction involving services, processed goods - everything except a few basic foodstuffs - at every point along the value chain," the statement reads.
READ: Zuma's disregard for business voice worrisome - consumer body
Fin24 asked the Consumer Goods Council of SA (CGCSA) for its take on what the impact would be of a consumer boycott by not buying goods for a day.
The CGCSA pointed out that VAT is a legal requirement that its retail members levy on goods that attract VAT. It is then paid to government through the SA Revenue Service (SARS). It also pointed out that there are basic foodstuffs that do not attract VAT.
"The buying behaviour of consumers is always a personal choice and a decision over which members of the Consumer Goods Council of South Africa has no control," the council told Fin24 on Friday.
"We, however, believe that income derived from VAT provides an essential source of revenue for the government to help it meet basic needs such as social grants and education, which are sorely needed by the vulnerable section of society."
Sanisha Packirisamy, economist at MMI Investments and Savings, confirmed that VAT is the second-largest source of tax income, according to National Treasury’s latest tax statistics.
Economist Mike Schüssler summed it up by saying that the idea of making an impact by not buying consumer goods for a day cannot really work as consumers will simply buy those items the next day.
Read Fin24's top stories trending on Twitter: Fin24’s top stories
