Johannesburg – Increasing the VAT rate could be more effective in closing the tax gap than an increase in taxes for the wealthy, says an expert.
Speaking at a pre-budget briefing, head of tax at Norton Rose Fulbright Andrew Wellsted explained that VAT is a more inclusive approach to raise tax revenue.
“VAT is transactional. Everyone transacts so everyone raises taxes,” said Wellsted. An income tax comprises a limited tax base, whereas VAT accounts for the entire population.