The Treasury has confirmed that the choice to extend Worth Added Tax (VAT) has been reversed.
The proposed VAT hike which might have been efficient on 1 Could was introduced by Finance Minister Enoch Godongwana when he delivered his Finances Speech for the 2025/2026 monetary yr was a contentious situation for events inside the ANC-led Authorities of Nationwide Unity (GNU
Notably, the Finance Minister’s determination comes because the Democratic Alliance (DA) and Financial Freedom Fighters (EFF) approached the Western Cape Excessive Court docket for the adopted fiscal framework to be scrapped.
PROPOSED VAT INCREASE SCRAPPED
In a press release, Treasury mentioned Godongwana will introduce the Charges and Financial Quantities and the Modification of Income Legal guidelines Payments (Charges Invoice), which proposes to take care of the VAT charge at 15% from 1 Could, as an alternative of the proposed enhance introduced within the 2025 Finances Speech.
Treasury mentioned the choice to waive the VAT enhance adopted in depth consultations with political events, and cautious consideration of the suggestions of the parliamentary committees.
Notably, by not rising VAT, estimated income will fall brief by R75 million over the medium time period.
ARE YOU RELIEVED BY THE DECISION TO REVERSE THE PREVIOUSLY ANNOUNCED VAT HIKE?
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