- South Africa’s proposed Value-Added Tax increase in 2025 will still proceed.
- VAT will increase by half a percentage point in May 2025 and by the same amount again in April 2026.
- These increases will take VAT to 16 percent.
- Several political parties in the Government of National Unity said they would not support the increase in VAT.
- The ANC’s ability to pass the budget is uncertain.
- The opposition will not stop the VAT hike from being implemented.
- National Treasury will need to wait on the Standing Committee on Finance.
- The framework will then pass onto public hearings.
- National Treasury will then respond to the framework.
- National Treasury will then send a report to the National Assembly.
- Axelson said he is hopeful that a resolution between parties will be found within the coming weeks to pass the budget.
- If there aren’t enough votes to pass the budget, South Africa will enter uncharted territory.
- The VAT increase to 15.5 percent will be effective on 1 May.
- The increase does not need parliament’s approval.
- Axelson said that the potential increase in VAT is the least damaging to economic growth.
- Spending needs to increase in South Africa.
- Axelson said that finding the funds is another challenge.
- One effective growth strategy is the investment in infrastructure.
- Reliable water and power, along with efficient roads and transport are essential.
- Investing in these areas can potentially lower business costs, improve efficiency and make them more effective.
- Public-private partnerships are seen as essential to fund, build, maintain and operate public infrastructure.
Source: businesstech.co.za
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.
