- The Minister of Finance plans to reverse the VAT hike in South Africa.
- The VAT rate will remain at 15 percent from 1 May 2025.
- The proposed 0.5 percentage point VAT increase has been canceled.
- The decision follows consultations with political parties and parliamentary committees.
- Estimated revenue will fall short by around R75 billion over the medium term.
- The Minister has withdrawn the Appropriation Bill and Division of Revenue Bill to propose expenditure adjustments.
- Parliament will adjust expenditure to maintain fiscal sustainability.
- Measures to cushion lower income households will be withdrawn.
- Additional revenue collected by SARS may be used to offset expenditure adjustments.
- A revised Appropriation Bill and Division of Revenue Bill will be introduced soon.
- The initial VAT increase was intended to fund critical services.
- The hike was rejected by political parties and the public.
- It is unclear how the budget process will be affected or how additional revenue will be found.
- Treasury is considering various proposals for future budgets to increase resources.
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.
