- Cancellation of VAT Increase: South Africa abandoned its plan to raise value-added tax (VAT) by 1 percentage point over two years due to political backlash that jeopardized the stability of the ruling coalition government.
- Political Disagreement: The proposal faced significant resistance, particularly from the Democratic Alliance, the second-largest coalition party, which argued that the tax hike would exacerbate financial strain on households already facing rising living costs.
- Economic Context: The decision comes as South Africa’s economy struggles with sluggish growth and public dissatisfaction, highlighting the challenges in finding sustainable revenue sources amidst increasing economic pressures.
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