New budget battle looms in South Africa as parties reject VAT increase

Weeks after the budget was first due to be delivered, South Africa’s finance minister Enoch Godongwana finally made the announcement on Wednesday.

But one of the main sticking points remains. An increase in value-added tax (VAT), which several political parties in the coalition government believe will hurt the poor.

“To raise the revenue needed, the government proposes to increase the VAT rate by half a percentage point in 2025/26, and…