South Africa’s finance minister wanted to raise VAT: the pros and cons of a tricky tax

By Andrew Robert Donaldson, Senior Research Associate, Southern Africa Labour and Development Research Unit, University of Cape Town

South Africa’s finance minister, Enoch Godongwana, cancelled the unveiling of the country’s 2025 budget as it was due to be released. The move is unprecedented in the country’s history.

The reason for the abrupt cancellation was the failure of the minister to get cabinet approval for the proposal to raise value added tax (VAT) from 15% to 17%. VAT is the second biggest contributor to tax collection after…

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