If the state needs to generate revenue, VAT might be a highly effective tool to achieve that goal.
The finance minister, Enoch Godongwana, was initially set to table the 2025 budget speech on 19 February; however, it was postponed due to disagreements over increasing value-added tax .
“While the political dynamics will only come to light after the re-tabled budget speech, and with the government needing to raise an additional R60 billion to meet its expenditure goals for the coming year, a VAT increase of some nature still remains likely.” It is reportedly framed as “the best of the worst options”, but increasing VAT again in any form may create unintended consequences.
Government has previously stated that increased VAT will support more health, education, and social grant spending, a laudable goal. He adds that the most long-lasting effect of the re-tabled budget may be how it sets the tone for future state spending.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Cosatu Warns Against VAT Hike in 2025 BudgetCosatu, a major South African trade union, has strongly criticized the potential increase in Value Added Tax (VAT) in the upcoming 2025 budget. The union argues that any VAT hike would disproportionately burden low-income workers already struggling with the rising cost of living and high interest rates. Cosatu calls on Finance Minister Enoch Godongwana to prioritize revenue collection through strengthening the South African Revenue Service (SARS) instead of imposing tax hikes on the working class.
Read more »
2025 Budget Speech: SACP rejects idea of VAT increaseThe SACP said it believes that suggestions to increase VAT are part of a wider propaganda campaign.
Read more »
Budget Speech 2025: Will Godongwana announce VAT hike?The upcoming Budget Speech is generating much discussion, particularly around the possibility of a VAT increase. Will Godongwana raise VAT from 15% to 16%? This potential hike has sparked debate, with economists arguing for its necessity to manage the constrained budget, while opposing voices warn of its impact on the working class and poor. The South African Communist Party has vehemently rejected the proposal, calling for a wealth tax instead and threatening mass mobilization if a VAT hike is announced. The Economic Freedom Fighters also oppose the increase, advocating for a return to previous VAT levels.
Read more »
Budget 2025: VAT increase decision not made by someone who knows hungerA 2% increase in VAT would hit poor people the hardest although the undelivered Budget 2025 added some foods to the zero-rated basket.
Read more »
Budget 2025: Was the decision to increase VAT by 2% such a bad idea?Poor and middle class consumer will bear the brunt if VAT is increased by 2% on 12 March and economists warn consumers are already under pressure.
Read more »
What budget alternatives are there to VAT increases in 2025?With a revised budget reportedly green-lit behind closed doors, economists explore all possible alternatives to VAT increases in 2025 …
Read more »