Financial Transactions Tax: An alternative to VAT increases

At the time, it became apparent that revenues could not match expenditures and suggestions were made to increase/review the rates of Value Added Tax (VAT) and income tax.

For the record, our VAT rate of 12% is the lowest in SADC whilst our corporate tax rate of 22% is second lowest, after Mauritius’ 15%. This article is dedicated to analysing the economic implications of a VAT increase as well as suggesting an alternative tax which could be introduced instead of raising the VAT rate.