South Africa scraps controversial VAT hike

RT.com
24 Apr 2025, 18:49 GMT+10

The decision follows extensive consultations with political parties, according to the National Treasury

Finance Minister Enoch Godongwana has scrapped the 0.5% Value Added Tax (VAT) hike that was set to kick in on May 1. VAT will remain at 15%.

The decision to forgo the increase follows extensive consultations with political parties, and careful consideration of the recommendations of the parliamentary committees, the National Treasury confirmed in a statement on Wednesday night.

By not increasing VAT, the estimated revenue will fall short by around R75 billion over the medium-term, his ministry said.

According to Treasury, Godongwana has also written to the Speaker of the National Assembly Thoko Didiza, informing her that he is withdrawing the plan.

It added that Parliament will be requested to adjust expenditure in a manner that ensures that the loss of revenue does not harm South Africa's fiscal sustainability.

"The decision not to increase VAT means that the measures to cushion lower-income households against the potential negative impact of the rate increase now need to be withdrawn and other expenditure decisions revisited.

"To offset the unavoidable expenditure adjustments, any additional revenue collected by SARS may be considered for this purpose going forward," the statement reads.

However, Godongwana will introduce a revised version of the budget without the VAT increase.

The initial proposal for a VAT hike was motivated by an urgent need to restore the funding of the frontline services that had suffered reductions.

First published by IOL

Watch latest videos

News RELEASES

Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Johannesburg Life.

More Information

null in null

International

Section

Christian man to appeal blasphemy death sentence in Pakistan

Pakistani Christian man to appeal death sentence for blasphemy

LAHORE, Pakistan: A Christian man in the town of Jaranwala, in eastern Pakistan, will appeal a death sentence given to him by an anti-terrorism...

Filipino devotees reenact crucifixion on Good Friday

Filipino devotees nailed to crosses to re-enact Christ's crucifixion

CUTID, Philippines: On April 18, Good Friday, Christian believers in the Philippines were nailed to crosses in a reenactment of Jesus...

US to restrict visas for 250 Nicaraguan officials

US to impose visa restrictions on over 250 Nicaraguan officials

WASHINGTON, D.C.: The United States will limit visas for more than 250 officials from Nicaragua, U.S. Secretary of State Marco Rubio...

Measles outbreak confirmed in Michigan's Montcalm County

Michigan reports first confirmed outbreak of measles since 2019

LANSING, Michigan: The Health Department in Michigan confirmed a measles outbreak in Montcalm County this week, marking the first such...

US Supreme Court to review trump birthright citizenship move

US Supreme Court to hear Trump bid on birthright citizenship order

WASHINGTON, D.C. The U.S. Supreme Court will hear arguments on May 15 about President Donald Trump's attempt to restrict automatic...

Trump signs order to ease seafood industry rules

Trump order seeks looser regulation of US fishing industry

WASHINGTON, D.C.: President Donald Trump has signed an executive order directing the U.S. Commerce Department to ease regulations on...

Africa

Section