VATupdate

Share this post on

South Africa’s VAT Hike: A Budgetary Battle

  • South Africa’s finance minister cancelled the unveiling of the 2025 budget due to the failure to get cabinet approval for a VAT increase.
  • The proposed VAT increase from 15% to 17% faced opposition from parties in the government of national unity.
  • The minister’s efforts to raise VAT follow a trend of increasing personal income tax.
  • In 2024, the budget relied on a “stealth tax” on personal income by not adjusting tax thresholds for inflation.
  • This resulted in a higher tax burden for individuals and brought more people into the tax net.
  • Personal income tax has increased significantly in recent years, eroding household disposable income.
  • Revenue from goods and services, including VAT, has grown slowly, while corporate income tax revenue has declined.

Source: theconversation.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

Sponsors:

VATIT Compliance

Advertisements:

  • VATAi