Give Politicians Less Money To Curb Overspending, Says Economist

Efficient Group's chief economist Dawie Roodt says South Africa should give politicians less money to curb overspending.

In a recent interview with Newzroom Afrika, Roodt shared his views regarding the issue of a planned value-added tax VAT increase.

This comes after Finance Minister Enoch Godongwana officially scrapped the planned VAT increase that had sparked backlash from across the political spectrum.

The proposed 0.5 percentage point VAT bump - originally pitched as a solution to South Africa's fiscal crunch - was axed following mounting pressure on the Treasury after a dismal performance by the State's legal team in court in late April.

The failed VAT hike was expected to generate an extra R15 billion in revenue and help close a R75 billion shortfall. With that avenue now shut, economists are questioning how the Treasury plans to make up the difference.