Cape Town – Finance Minister Enoch Godongwana has announced a 0.5% VAT increase to address a R60 billion budget shortfall, with another 0.5% hike planned for next year, bringing the VAT rate to 16% by 2026.
The decision follows earlier disagreements within the government of national unity (GNU) over a proposed 2% increase, which led to the budget’s postponement.
Godongwana on VAT increases: To raise the revenue needed, the government proposes to increase the VAT rate by half- a percentage point in 2025/26, and by another half-a-percentage point in the following year, this will bring the VAT rateto 16% by 26/27. . #BudgetSpeech2025 pic.twitter.com/m5E7H1qL2I
— SABC News (@SABCNews) March 12, 2025
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Compiled by Betha Madhomu
