Godongwana to reverse decision to hike VAT
This was confirmed in an overnight media statement by the National Treasury, which said that VAT would remain at 15%.
Finance Minister Enoch Godongwana answers questions from the media about the 2025 budget tabled. Picture: GCIS
JOHANNESBURG - Finance Minister Enoch Godongwana has announced he will be reversing the decision to increase value-added tax (VAT).
This was confirmed in an overnight media statement by the National Treasury, which said that VAT would remain at 15%.
[NEWS] Enoch Godongwana, Finance Minister, has reversed the decision to increase Value Added Tax by 0,5% from the 1st of May 2025.
— EWN Reporter (@ewnreporter) April 24, 2025
The minister will be withdrawing the Appropriation and Division of Revenue bills for amendment to reflect the revenue shortfall. TCG pic.twitter.com/iwY9Jy3SSD
VAT was due to increase by 0.5 percentage points next week Thursday.
With a week left until the VAT increase would have come into effect, Godongwana seems to have found ways to raise money without increasing taxes.
The minister has written to the Speaker of the National Assembly, indicating that he will be withdrawing the Appropriation and Division of Revenue bills.
This will allow Parliament to adjust the expenditure figures to accommodate the shortfall that will come from not increasing VAT.
The minister said that revised versions of both bills would be presented to Parliament within the next few weeks.
Godongwana said the decision to not increase VAT came after consultations with various political parties and recommendations from the parliamentary committees.