VAT Increase Cancelled

Treasury has announced, on the 24 April 2025, that the proposed VAT increase of 1% have been cancelled. https://www.gov.za/news/media-statements/treasury-reversal-vat-increase-24-apr-2025

This is a momentous occasion for the GNU in South Africa, where democracy is starting to be implemented properly in government. Parties of the GNU are testing their limits of their agreement. This matter had to go to court.

Surely the nation has benefitted from this decision, as many poor people around the nation would have been heavily impacted by the VAT increase. “The decision not to increase VAT means that the measures to cushion lower income households against the potential negative impact of the rate increase now need to be withdrawn and other expenditure decisions revisited. To offset the unavoidable expenditure adjustments, any additional revenue collected by SARS may be considered for this purpose going forward.“

Now government needs to deal with removing corruption and cutting wasteful expenditure. Real jobs need to be created. Industry needs to be stimulated. Young people want to work. We need Entrepreneurs to take the risk with the support of government and grow South Africa. Increase the tax base. Implement real development. Build our export products. Import less. Reduce our countries debt.

The South African Revenue Service needs to collect the outstanding debt, with meaningful engagement with taxpayers. Implementing proper payment plans and solutions to the ever-increasing unpaid debt. This, as noted previously by SARS will fill the gap of no VAT increase, the R75 billion needed to meet the budget.

All business owners will be pleased to not have to change their accounting systems to account for a VAT increase. The administration burden for May 2025 has just been reduced. You can focus on business as usual.