POSSIBLE VAT HIKE REVERSE ON THE CARDS

The VAT hike set to increase on 1 May has caused massive uproar among politicians, the public and the private sector.

Now, after much deliberation it seems as if the hike could be reversed within two months. This is due to higher revenues in government’s 2025/2026 budget.

According to a report in the Sunday Times, finance minister Enoch Godongwana has “responded positively” to an amended propose of his fiscal framework that could increase the revenue to R60 billion.

Together, the South African Revenue Service (SARS) and National Treasury are expected to present the proposal to President Cyril Ramaphosa before a scheduled Government of National Unity (GNU) meeting on Wednesday 23 April.

Several companies and financial institutions have already alerted their clients to the fact that the VAT increase will impact their prices.

But, with the possible reversal of the hike on the cards, this would mean rebates will be paid to these companies and consumers to compensate for the 0.5% increase for the two months.

MyBroadband reports that, according to Standing Committee on Public Accounts chair Songezo Zibi, who is also the leader of Rize Mzansi, a majority of MPs would need to support the solution when Parliament reopens in early May.

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