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India Gazette
7 days ago
- Business
- India Gazette
"Major boost for Bihar's aviation sector": Sanjay Jha praises CM Nitish after cabinet reduced VAT on Aviation Turbine Fuel
Patna (Bihar) [India], June 3 (ANI): Janata Dal (United) MP Sanjay Kumar Jha, on Tuesday, praised Bihar Chief Minister Nitish Kumar after state cabinet reduced Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) from 29 per cent to just 4 per cent. In a post on X, Jha termed it a major boost for Bihar's aviation sector. 'The Bihar Cabinet has taken a landmark step by reducing VAT on Aviation Turbine Fuel (ATF) from 29% to just 4%. For flights under the Regional Connectivity Scheme (RCS), the VAT rate remains unchanged at 1%. Heartfelt gratitude to CM Nitishumar Ji for this progressive decision, one that will encourage more airlines to operate in the state and make air travel more accessible and affordable,' Sanjay Jha said. 'This reform is expected to significantly boost the number of flights from Patna, Darbhanga, and Gayaji, enhancing Bihar's air connectivity and opening new avenues for tourism, trade, and growth,' the JD(U) MP said. Bihar Chief Minister Nitish Kumar chaired a high-level cabinet meeting on Tuesday and approved 47 key proposals, including large-scale infrastructure projects, new government job openings, and significant policy decisions. The Bihar Cabinet approved the creation of 4,858 new posts across various government departments to improve administrative efficiency and public service delivery. Among the major infrastructure decisions, a Rs 1,320 crore plan was approved for setting up a sewerage network project in Sasaram, Aurangabad, and Siwan. In addition, a Rs 328 crore water supply scheme received clearance for Ara, Siwan, and Sasaram cities, aiming to boost urban utility services. The cabinet also approved a new Bridge Maintenance Policy, which would ensure regular inspection, safety checks, and timely repairs of bridges across the state. In a move expected to improve air connectivity, the Value-Added Tax (VAT) on Aviation Turbine Fuel (ATF) in Bihar was reduced from 29 per cent to 4 per cent. A proposal to build a dry dock in Dujra, Patna, was also approved. The facility will be used to repair aircraft, making it the first such unit in the region. In a significant step towards women's empowerment, the cabinet decided that 'Jeevika Didis' (members of the state's women's self-help groups) would prepare clothes for children at Anganwadi centres. The area of Phulwari Sharif, Danapur, and Khagol near the capital of Patna will be expanded, and many villages will become part of these cities. (ANI)
The National
19-05-2025
- Business
- The National
Abu Dhabi's industrial GDP jumps to $30 billion in 2024
Abu Dhabi's industrial economic output increased to Dh111.6 billion ($30.38 billion) in 2024, up 23 per cent since the emirate unveiled its industrial strategy in 2022, according to the chairman of Abu Dhabi Department of Economic Development (Added). The emirate recorded Dh101 billion in industrial gross domestic product in 2023. The number of industries grew 19 per cent to 1,104 during the two-year period, Ahmed Al Zaabi told Make It In The Emirates in Abu Dhabi on Monday. 'We work closely with the Ministry of Industry and Advanced Technology to contribute to Operation 300bn aiming to raise the industrial sector gross domestic product to Dh300 billion by 2031 and align with the UAE's Net Zero 2050 Strategy,' Mr Al Zaabi said. Abu Dhabi's manufacturing sector increased its contribution to 53 per cent of UAE's industrial gross domestic product, compared to a contribution of 51.3 per cent to the UAE's industrial sector in 2023 and 46 per cent in 2022, he added. Abu Dhabi has continued its shift away from oil and has taken several measures to attract international investors, boost its competitiveness and improve the ease of doing business. In 2022, the emirate launched an industrial strategy to improve the contribution of the sector to the economy, by investing Dh10 billion across six programmes to more than double the emirate's manufacturing to Dh172 billion by 2031. Abu Dhabi also laid out long-term strategies to develop sectors including tourism, aviation and technology, with new investments in artificial intelligence. Abu Dhabi's economy expanded by 3.8 per cent annually in 2024 to reach an all-time high value of Dh1.2 trillion as growth of the non-oil sector continued. Last year, Abu Dhabi's manufacturing sector remained the largest non-oil contributor to the emirate's GDP, accounting for 9.5 per cent of total GDP and 17.3 per cent of non-oil GDP, according to Added. Abu Dhabi has been supporting industries with funding as well as in boosting productivity and increasing exports, Mr Al Zaabi added. 'We help them in understating existing economic partnerships and what are the products to focus on and how to benefit from trade agreements.' In the first quarter, the industrial sector continued its growth with the number of new industrial licences rising 4.7 per cent annually to 89 compared, according to Added. The number of industrial licences from under-construction to production stage also surged by 65 per cent to 33 during the period. There remains potential for strong growth in Abu Dhabi's manufacturing industry amid expansion, according to Mohammad Al Kamali, chief industry and trade officer at Abu Dhabi Investment Office. 'We are working very closely with our investor growth team to make sure we attract more investment to come to Abu Dhabi,' he told The National on the sidelines of the Make It In The Emirates event. 'But … we've designed specific products also for the existing manufacturers over here. So, we work with them within an ecosystem that enables them for more productivity and domestic and international growth as well.' Global supply chains have been threatened with disruption in recent weeks over the tariffs threat from US President Donald Trump. 'We have learnt that every challenge will create an opportunity, and that's exactly how we are working on it. We have a diversification in terms of our international markets. We are trying to expand into the existing markets that most of our companies are doing,' Mr Al Kamali said. 'We are trying to update our countries with different regulatory frameworks that's actually happening from an international trade perspective. We also capitalise into our Comprehensive Economic Partnership Agreements that the UAE is signing with many countries. It's coming in force now, currently, and we are benefiting from it as well. So market international diversification is something which we really see a huge potential out of it,' he said. Adio is also focused on promoting localisation in the supply chain, he added.
IOL News
30-04-2025
- Business
- IOL News
The bitter pill? VAT hike's threat to South Africa's agricultural heart and food security
South Africa's Treasury cancelled planned VAT increase amid economic challenges welcomed. The ripple effects of increased input costs will have inevitably reached consumers through higher food prices. Image: IOL/Independent Newspapers By Dr Thulasizwe Mkhabela The recent tabling of the 2025/26 budget, with its proposed 2% increase in Value Added Tax (VAT) spread over two years, has ignited a firestorm of debate. While the National Treasury aims to bolster State coffers, the potential repercussions for South Africa's agricultural sector and, critically, our nation's food security warrant serious scrutiny. This VAT hike presents a significant threat that demands careful consideration. Agriculture, the bedrock of food security and a significant contributor to South Africa's economy, operates on tight margins. Input costs, ranging from fertilisers and pesticides to fuel and machinery, are already substantial and often volatile. A VAT increase directly inflates these costs. Farmers, particularly small-scale producers vulnerable to price fluctuations and lacking economies of scale, will face increased financial pressure. This could lead to reduced productivity, delayed investments in crucial infrastructure and technology, and potentially even farm closures. The ripple effects of increased input costs will inevitably reach consumers through higher food prices. While basic food items are currently VAT-exempt, the increased production, processing, and transportation costs – all subject to VAT – will be factored into the final price. This indirect impact will disproportionately affect low-income households, who already spend a significant portion of their income on food. A seemingly small 1% yearly increasecan translate to a substantial burden on those struggling to put food on the table, exacerbating food insecurity. Furthermore, the VAT hike could stifle growth within the agricultural sector itself. Reduced profitability may deter new entrants, particularly young entrepreneurs, from venturing into farming. It could also disincentivise expansion and innovation, hindering the sector's ability to meet the growing food demands of a burgeoning population. A weakened agricultural sector translates to a less resilient food system, making the nation more vulnerable to external shocks and price volatility in global markets. The argument that increased government revenue from VAT will ultimately benefit the populace through improved services needs to be weighed against the immediate and direct impact on food affordability and agricultural viability. While fiscal responsibility is crucial, policies must be carefully evaluated for their potential to undermine food security, a fundamental human right. The government must explore alternative revenue-generating measures that do not disproportionately burden the agricultural sector and the poor. Targeted support programs for small-scale farmers to absorb increased input costs, coupled with efficient and transparent use of existing tax revenues, should be prioritised. A comprehensive review of the VAT exemption list for essential food items could also be considered to further cushion the impact on vulnerable households. To mitigate the negative effects of the proposed VAT increase on South Africa's agricultural sector and food security, several alternative policy options can be considered: 1. Targeted Subsidies and Support for Agriculture: - Direct Input Subsidies: Implement subsidies on essential inputs like fertilisers and seeds to reduce costs for farmers, especially small-scale producers. - VAT Rebates for Agricultural Inputs: Allow registered agricultural producers to claim VAT rebates on specific farming inputs, effectively zero-rating them. - Financial Support Programs: Enhance low-interest loans or grants for small-scale farmers to invest in technology and infrastructure. 2. Enhancing Food Security for Low-Income Households: - Expansion of Social Safety Nets: Increase the value of social grants to bolster the purchasing power of vulnerable households. - Targeted Food Assistance Programs: Strengthen food assistance initiatives like school feeding schemes and food vouchers for low-income families. - Zero-Rating Additional Basic Food Items: Review and potentially expand the list of VAT-exempt basic food items to alleviate the VAT impact on low-income households. 3. Strengthening the Food Value Chain: - Investment in Infrastructure: Increase investment in rural infrastructure to lower transportation costs and food prices. - Support for Local Food Production: Implement policies encouraging local food production to reduce reliance on imported goods. - Reducing Food Waste: Initiate programs to minimise food waste through training onbetter handling and consumer awareness. 4. Exploring Alternative Revenue Generation Measures: - Progressive Income Tax Adjustments: Adjust the income tax system to ensure higher earners contribute more, rather than increasing VAT. - Wealth Tax: Consider a wealth tax on high-net-worth individuals to generate revenue without impacting basic consumption. - Increased Efficiency in Tax Collection: Improve the efficiency of tax collection to reduce the need for broad tax increases. In conclusion, while the need for fiscal consolidation is understood, the proposed VAT hike carries significant risks for South Africa's agricultural sector and the food security of its citizens. Policymakers must engage in thorough consultations with agricultural stakeholders and food security experts to fully understand the potential deleterious effects and explore more equitable and sustainable alternatives. Failing to do so could sow the seeds of deeperfood insecurity and undermine the long-term health of a vital sector of our economy. The bitter pill of a VAT hike might ultimately leave a far more damaging aftertaste for the most vulnerable in our society and the agricultural landscape that sustains us all. Dr Thulasizwe Mkhabela is an Honorary Research Fellow with the African Centre for Food Security and the University of KwaZulu-Natal Image: LinkedIn
IOL News
29-04-2025
- Politics
- IOL News
Julius Malema declares EFF's refusal to join DA in Government of National Unity
Malema: EFF will not collaborate with DA in Government of National Unity. Image: Supplied Economic Freedom Fighter (EFF) leader Julius Malema has reiterated his disdain for the Democratic Alliance (DA) and its position in the Government of National Unity (GNU). Malema claimed that the African National Congress (ANC) would fare better in a government with his party rather than the John Steenhuisen-led DA. "The GNU has collapsed. They are still managing each other. But there will come a time when one of them would need to make a decision. We will not work with the DA. We don't want to work with the DA. We'll fold our arms. The ANC with the EFF make up 49%," Malema said. The GNU is currently suffering from a leadership crisis. The DA and ANC have disagreed on how the government should be administered, with the blue party opposing several of the ANC's ideas. The DA recently took high court action against Finance Minister Enoch Godongwana to contest the planned 0.5% Value Added Tax (VAT), claiming that it would be unjust to taxpayers. But Godongwana has subsequently scrapped it, and the court has also stopped the increase.
IOL News
24-04-2025
- Business
- IOL News
Massive triumph for political organisations as treasury scraps 0.5% VAT increase
Finance minister Enoch Godongwana was forced to postpone his initial Budget Speech, which was meant to take place in February, with members of parliament taking issue with the proposed 2% Value Added Tax (VAT) increase. Image: Phando Jikelo/ Parliament of SA Finance Minister Enoch Godogwana, after immense pressure from political parties, has finally cowered and scrapped the proposed 0.5% increase in Value-Added Tax (VAT). The decision comes after intense negotiations and pressure from various political parties, who argued that the increase would burden the poor and working class. Godongwana has announced that the National Treasury would no longer be implementing the controversial 0.5 percentage points increase in the VAT from 1 May in a statement on Wednesday night. Last month, the finance minister proposed to increase the VAT from 15% to 15.5% after his Budget Speech was postponed in February when he proposed to increase VAT by 2 percentage points. The DA has claimed victory in getting the National Treasury to drop its intended 0.5 percentage point VAT increase. According to reports, lawyers acting for Finance Minister Enoch Godongwana approached the DA's lawyers, indicating that the VAT increase would not be pursued. DA federal council chairperson, Helen Zille, said Godongwana should be "embarrassed" for buckling under pressure after fighting for the increase even in court. Zille said ANC also deliberately deceived smaller parties when it said they would consider other alternatives, even when the VAT increase was already confirmed. The DA has also indicated that they would be continuing with the legal action, heard on Tuesday, on the VAT matter despite it being scrapped. However, the ANC has hit back at political parties claiming "victory" over the reversal of the VAT increase. ANC spokesperson Mahlengi Bhengu-Motsiri, during a press conference, said the decision was not made under pressure but by Parliament itself. "This outcome did not arise from experience, nor as a concession to pressure or coercion, but from a shared commitment across party lines that the working class, the poor, and all other people cannot be further burdened in this economic climate," she said. Action SA president Herman Mashaba said reversing this VAT increase was not achieved by the parties who were in court Tuesday. 'VAT reversal was achieved by political parties that were willing to put their differences aside and demonstrate the maturity required to find an alternative to a VAT increase,' Mashaba said. Other political parties have also welcomed the decision to scrap the VAT increase. The EFF noted and welcomed the decision, saying the budget failed to appreciate the degree and depth of the economic crisis South Africa is confronted with. "South Africans need jobs and economic growth urgently, and the state is the only institution with the capacity to respond," said the EFF. The Congress of South African Trade Unions (Cosatu) applauded the Minister for Finance's announcement, saying it would provide relief to millions of workers struggling to cope with the rising costs of living. "What is needed now is for a simple surgical adjustment of the budget's expenditure allocations," said Cosatu. The Pan Africanist Congress of Azania (PAC) welcomed the outcome of extended and principled deliberations on the 2025 Fiscal Framework, saying it was a critical victory for the working class and poor. "From the onset, the PAC firmly rejected any tax policy that burdens the poor," said the party. RISE Mzansi National Leader Songezo Zibi said the party takes positive note of the Finance Minister's announcement, which begins the legislative process of keeping VAT at its current rate of 15%. "This union of political parties with the aim of finding a solution means that the Finance Minister and Parliament are now free to proceed with the rest of the Budget process without being held hostage by narrow political priorities," said Zibi. The African Transformation Movement (ATM) warmly welcomed the decision, saying it was a significant victory for the party and the citizens of South Africa who stood firm against the hike. Build One South Africa (Bosa) also welcomed the decision, saying it was a direct result of sustained pressure and principled advocacy. Al Jama-Ah said the party had successfully turned the tide on the proposed VAT increase, securing a critical victory for the people of South Africa. "As a party committed to justice and equity, Al Jama-ah has consistently opposed oppressive taxation, including VAT, which disproportionately impacts the poor and working-class," said the party.
