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Moneyweb reports that Finance Minister Enoch Godongwana has finally caved to widespread pressure by canning the planned 0.5 percentage point hike in Value-Added Tax (Vat).
National Treasury announced the decision in a statement issued just after midnight on Thursday, saying the minister “will shortly introduce the Rates and Monetary Amounts and the Amendment of Revenue Laws Bill [Rates Bill], which proposes to maintain the Vat rate at 15% from 1 May 2025, instead of the proposed increase to Vat announced in the Budget in March”. This development came as the DA and EFF have taken the matter to the Western Cape High Court, after being amongst the most vocal against the Vat hike since it was first mooted at a higher rate in the cancelled February budget. Godongwana and the ANC pushed ahead with a lower increase tabled in the March budget. “The decision to forgo the increase follows extensive consultations with political parties, and careful consideration of the recommendations of the parliamentary committees,” National Treasury noted on Thursday. It went on to indicate: “The decision not to increase Vat means that the measures to cushion lower-income households against the potential negative impact of the rate increase now need to be withdrawn and other expenditure decisions revisited.”
- Read the full original of the report in the above regard by Suren Naidoo at Moneyweb
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