VAT to remain at 15%, hike reversed, Treasury announces
Treasury said Finance Minister Enoch Godongwana will introduce legislation that reverses his decision.
Minister of Finance Enoch Godongwana briefs the media after the budget speech was postponed at Imbizo Media Centre on February 19, 2025 in Cape Town, South Africa. Picture: Burger/Jaco Marais
The proposed VAT increase has been reversed and will remain at 15%, bringing an end to a two-month battle and legal challenges over the unpopular tax hike.
The treasury made the announcement shortly after midnight on Thursday.
VAT reversed
Treasury said Finance Minister Enoch Godongwana will introduce legislation that reverses his decision to implement an initial 0.5 percentage point hike on 1 May, followed by a second hike by the same margin on April 1 next year.
'The Minister of Finance will shortly introduce the Rates and Monetary Amounts and the
Amendment of Revenue Laws Bill (Rates Bill), which proposes to maintain the Value-Added
Tax (VAT) rate at 15 per cent from 1 May 2025, instead of the proposed increase to VAT
announced in the Budget in March,' The Treasury said.
'The decision to forgo the increase follows extensive consultations with political parties, and
careful consideration of the recommendations of the parliamentary committees. By not
increasing VAT, estimated revenue will fall short by around R75 billion over the medium term.'
*This is a developing story
ALSO READ: EFF calls for 'apartheid tax' counter instead of VAT hike [VIDEO]
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