South Africa’s Controversial VAT Hike Approved Despite Opposition and Non-Binding Recommendations

• The VAT hike in South Africa will proceed on 1 May after approval by the National Assembly.
• Parliament voted 194 to 182 to adopt the 2025 fiscal framework report.
• The report’s adoption is a step in implementing the 2025 budget, with the Tax Amendment Bill to follow.
• Finance Minister Enoch Godongwana confirmed the VAT hike remains part of the budget.
• Proposals to amend the budget were rejected by the standing committee.
• ANC and IFP supported ActionSA’s non-binding recommendation to find alternatives to the VAT hike.
• The framework was adopted without changes, with a recommendation for alternatives within 30 days.
• ActionSA’s support was conditional on the acceptance of its recommendations.
• The recommendation’s binding nature is uncertain and open to interpretation.
• Legal experts say stopping the VAT hike requires a new law, unlikely before implementation.
• ActionSA believes its recommendation could prevent the hike.
• Trollip suggested the minister could find additional revenue to avoid the VAT hike.

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.

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