Government Reverses VAT Hike Following Parliamentary Pushback, Plans Budget Revisions

24 April 2025 — VAT Hike Scrapped, Budget Revisions to Follow

South Africa’s Minister of Finance has canceled the planned VAT increase set for 1 May, keeping the rate at 15%. The move, made after consultations with political leaders and committees, leaves a projected R75 billion revenue gap over the medium term.

In response, the Appropriation and Division of Revenue Bills have been withdrawn, with revised versions to be submitted to adjust spending. Measures to shield low-income households from the hike will also be dropped.

The VAT increase was originally intended to bolster funding for essential services amid fiscal constraints. A revised budget will be presented to Parliament in the coming weeks.

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