The South African government has scrapped its planned VAT hike after a national outcry… proof that when citizens, parties and pressure align, real change is possible.
South Africa (24 April 2025) – There’s a quiet power in the collective voice of a nation. And this week, that voice made waves.
The South African government has officially withdrawn the planned VAT increase that was meant to kick in on the 1st of May 2025. It’s a massive win, not just politically, but for the everyday South African who is already stretched far too thin.
The proposal to raise VAT by 1 percentage point over the next two years was part of a broader plan to boost revenue and “close the budget gap”. But when the details emerged that it would hit consumers by 0.5% this year and again next year, the reaction was swift, sharp and unified across party lines and social media feeds.
Why was this such a big deal?
Because VAT (value-added tax) is a consumption tax. It doesn’t care how much you earn. It’s a flat rate applied to most goods and services. That means lower-income households, who already spend a higher proportion of their income on everyday essentials, would have felt the brunt of the hike the hardest.
And with poverty levels still unacceptably high, and unemployment stubbornly stuck, this increase would’ve been devastating.
Research from the University of Pretoria and the National Agricultural Marketing Council showed that the hike would have shrunk household spending, trimmed down GDP and pushed inequality even further. It might have raised R13.5 billion a year on paper but it would’ve cost South Africans more than just rands and cents. It would’ve cost dignity.
So, what shifted?
According to a media statement published in the early hours of Thursday morning, the South African government explained that the decision to forgo the increase followed “extensive consultations with political parties, and careful consideration of the recommendations of the parliamentary committees”.
“As a result, the Minister of Finance has written to the Speaker of the National Assembly to indicate that he is withdrawing the Appropriation Bill and the Division of Revenue Bill, in order to propose expenditure adjustments to cover this shortfall in revenue. Parliament will be requested to adjust expenditure in a manner that ensures that the loss of revenue does not harm South Africa’s fiscal sustainability.”
But several things may have helped turn the tide.
The DA and EFF’s urgent court challenge sent a strong message that political powerhouses weren’t going to let this slide quietly. Smaller parties (many of whom backed the national budget) questioned whether raising VAT was really the right path. And South Africans themselves took to social media to voice their frustration, their fear and their absolute exhaustion at always being the ones footing the bill for poor governance.
Whether it was a strategic pivot or a rare moment of listening, the finance ministry confirmed on Thursday that the hike was officially off the table. VAT will remain at 15% and Finance Minister Enoch Godongwana will present a revised budget soon.
Of course, this doesn’t magically fix the economy. Revenue shortfalls remain. The budget will still need adjusting. But for now, this backtrack signals something hopeful: That pressure works. That people matter. And that maybe, just maybe, government is starting to understand that the real cost of mismanagement can’t keep falling on the shoulders of citizens who are already carrying more than their share.
Where do we go from here?
Hopefully, this moment becomes a turning point. A reminder that South Africans are not passive. That we’re tired of paying extra – not just in VAT, but in opportunity costs, trust and hope – for corruption, inefficiency and empty promises.
This is good news, not just because we’ve dodged another economic blow but because the democratic process worked. Because voices were heard. Because change was made. Let’s hold on to that. Let’s keep holding power to account. And let’s keep reminding each other LOUDLY, kindly and courageously… that we deserve better.
Because we do.
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