Finance Minister Enoch Godongwana has announced that the 2025 Budget Review will be re-tabled on Wednesday, 21 May, following the withdrawal of the proposed 0.5%-percentage Value-Added Tax (VAT) increase initially planned for 1 May.
The decision comes after what the minister described as a “rigorous and healthy” national debate sparked by the Budget first tabled on 12 March.
The revised review will reflect widespread public and political pushback and the Minister’s commitment to sound fiscal management without burdening citizens further.
Speaking at a media briefing in Pretoria, Godongwana confirmed: “There is clarity today: VAT will remain at 15%. This decision was shaped not only by political debates but importantly, by the voices of South Africans. When people speak, we must also listen.”
He expressed confidence in achieving fiscal goals without raising VAT, noting that critical services such as education, healthcare, and social grants will remain protected.
Three-pillar fiscal strategy going forward:
- Cost Management & Budget Discipline
The Minister reiterated Treasury’s stance against raising other taxes or increasing borrowing, emphasising that the focus will be on managing expenditure and eliminating waste: “We already spend more than R1 billion a day servicing debt. We must do more with less.” - Enhanced Revenue Collection
Treasury will bolster the South African Revenue Service (SARS) to collect outstanding taxes and tackle illicit trade, aiming to strengthen revenue without raising tax rates. - Economic Growth & Job Creation “Job creation is the number one priority,” said Godongwana, pointing to accelerated economic reforms under Operation Vulindlela to improve investment conditions and drive inclusive growth.
Minister Godongwana affirmed that the challenges facing South Africa are significant, but can be overcome through discipline, collaboration, and reform:
“The new Budget will reflect these goals clearly when we present it on 21 May 2025. This is our commitment to building a stronger economy and a better future for all South Africans.”
On a scale of 1 to 10, how happy are you that the proposed VAT hike has been scrapped?
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