South Africa’s Finance Minister to Reverse VAT Hike, Proposes New Revenue Measures

• 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• The Minister has withdrawn the Appropriation Bill and Division of Revenue Bill to propose expenditure adjustments.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• Measures to cushion lower income households will be withdrawn.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.

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