File: South Africa's new Finance Minister Malusi Gigaba said on Monday he would pursue "tough and unpopular choices" to oversee economic growth.
JOHANNESBURG - Finance Minister Malusi Gigaba&39;s budget speech delivered on Wednesday will have dire effects for the poor, that is the sentiment shared by some civil society organisations, ordinary citizens and political parties on Thursday.
Greenpeace Africa&39;s political advisor Happy Khambule said the budget "failed" the people of South Africa.
"A controversial 1% increase in VAT was announced, which will impact on the poorest in this country the most," he said.
WATCH: VAT, fuel levy to increase
Gigaba announced that VAT will increase from April for the first time in the democratic South Africa.
The increase will result in hiked food prices, however Gigaba said the current zero-rating of basic food items such as maize meal, brown bread, dried beans and rice would limit the impact of the VAT hike on the poorest households.
The Study in Poverty and Inequality Institute&39;s Isobel Frye said the budget would inconvenience the poor.
"The poor got incredibly shortchanged in this budget...to eat enough food to to get subsistence," she said.
Former public protector Thuli Madonsela questioned whether the budget was consistent with the constitutional commitment to eliminate poverty in the country.
A sober question we need to ask is whether the budget as announced is consistent with the constitutional commitment to eliminate poverty and inequality and whether it has the unintended impact of exacerbating poverty and inequality thus undermining socialjustice budgetvote— Prof Thuli Madonsela (@ThuliMadonsela3) February 21, 2018
The United Democratic Movement&39;s Nqabayomzi Kwankwa said government should find means of increasing corporate tax instead of increasing the VAT.
"The issue that we are not happy about is where they have to raise the VAT meaning that the poor must pluck in the revenue shortfall instead of getting everyone in the system including the corporate sectors to say we are in this together. We need to find solutions together even if it means increasing the corporate tax a bit," he said.