JOHANNESBURG - A VAT hike of 0.75 percentage points is one of the options presented to National Treasury to enable it to fund the R60-billion medium-term budget shortfall.
But, what exactly is VAT and how will this impact consumers?
VAT is a consumption tax levied on the value added at each stage of a product's production and distribution.
It is similar to, and often compared with, sales tax.
And even though it is an indirect tax, the consumer ultimately bears the brunt.
Though there are 19 essential items that are free from VAT, the impact on your wallet will be felt when buying many other items that include margarine, chocolates, baby food, coffee and wheat flour, to name but a few.