ANC to Drop VAT Hike Plan Following Widespread Opposition

In a significant policy shift, South Africa’s African National Congress (ANC) has decided to abandon its push for a VAT hike as part of the 2025 budget following intense opposition from coalition partners and other political parties. The move follows constructive talks between the ANC and opposition parties, including the Democratic Alliance (DA). The DA opposes the hike primarily due to concerns over its impact on economic growth and job creation. With the VAT hike off the table, Finance Minister Enoch Godongwana now faces the challenge of finding alternative solutions to address the $710 million budget shortfall. To resolve the situation, some economists have suggested that the ANC draw up a new budget.

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