VAT Hike Looms as Budget Tussle Takes Unexpected Turn

Johannesburg – South African consumers face an impending 0.5% VAT increase set to take effect on 1 May unless the ANC can urgently pass new legislation to prevent it.

Budget Standoff Creates Uncertainty

The scheduled VAT increase has become the center of a political battle as Parliament races against time to potentially halt the implementation. According to financial experts, the 0.5-percentage-point hike would raise the standard VAT rate from 15% to 15.5%.

Legislative Hurdles Remain

To stop the automatic increase, the ANC would need to:

• Introduce a new Rates Amendment Bill
• Secure parliamentary approval before the deadline
• Navigate complex coalition negotiations

Political analysts suggest the tight timeline makes successful intervention unlikely without extraordinary parliamentary measures.

Economic Implications

The potential VAT increase comes at a sensitive time for South African households already grappling with:

• High inflation rates
• Rising food prices
• Increased cost of living

Business groups have expressed concern about the impact on consumer spending, while Treasury officials maintain the additional revenue is needed to address budget shortfalls.

For more details, read the full report on News24.