No VAT Hike in South Africa's 2025 Budget, Finance Minister Announces
19:52 22.05.2025 (Updated: 20:04 22.05.2025)
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No VAT Hike in South Africa's 2025 Budget, Finance Minister Announces
"This decision demonstrates our commitment to listening to South Africans and all the political parties represented in this House," Enoch Godongwana said, delivering the budget speech.
However, not increasing VAT without an alternative revenue source limits funding for new government programs, according to the minister.
"Nevertheless, this budget supports sustainable finances, the social wage, and investments in economic growth," the official noted.
Godongwana emphasized that "this is not an austerity budget," as non-interest expenditure will rise by an average of 5.4% over three years (0.8% in real terms).
The announcement follows public backlash and debate between the two largest parties in the coalition government over the revenue-raising plan, which initially implied a 0.5 percentage point VAT hike.
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