The Consequences of VAT Increase on Citizens
Understanding the Impact of VAT Increases
Discuss the impact of increase in VAT in citizens and the economy.
VAT for instance has recently been adjusted upwards, something that has caused concern among citizens.
A number of people believe that this request will ultimately result in the increase of prices for essential commodities.
To counterbalance such effects the government has put forward measures that can be viewed as incentives.
Nonetheless, it may continue to impose the costs to low-income families in the long run. Analysts point that when is raised, it is typically followed by an increase in inflation that evaporates any gains made by the poor, besides, food prices go up, thus affecting the poor.
This is means that the poorer households will be affected most than the other households in the economy. When the prices have gone up, the purchasing power of many citizens will have gone down.
This increase may operate in a vicious cycle that sees families borrowing more to pay for the VAT.
Therefore, the VAT increase has supposed different difficulties for the citizens. These impacts should not go unnoticed by policy makers today as they place critical decisions towards the achievement of the nation’s goals.
