He was addressing members of the media on Monday following the party’s 14th Congress Central Committee third plenary session in Kempton Park‚ east of Johannesburg.
Last week Gigaba said the increase was to ensure to raise head with the R48.2-billion budget shortfall and to increase revenue.
Other tax increases include a 52 cents per litre rise in the fuel levy – made up of 22 cents per litre for the general fuel levy and 30 cents per litre for the Road Accident Fund levy – and rises of between 6 and 10 percent in the alcohol and tobacco excise duties.
“What is more‚ other indirect taxes‚ like the increase in the fuel levy‚ will further impact on the cost of living especially for the poor. Overall‚ the macro-economic impact of the VAT increase will dampen demand‚ impact on GDP growth and have negative implications for the employment creation‚” said Nzimande.
He said that the SACP would be campaigning to ensure that by the time of the next budget the VAT increase will be rolled back‚ and that other measures must be found to address the deficit‚ including “active recovery of billions of stolen capital”.