CAPE TOWN - Finance Minister Enoch Godongwana has increased VAT by 1 percentage point over two years.
The split is that 0.5 percentage points will be implemented this year. Should there be no fiscal change, the other 0.5 percentage points will be implemented next year.
Godongwana made the announcement on Wednesday after it was postponed in February.
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This increase will take VAT to 16 percent in the 2026/2027 fiscal year.
The Democratic Alliance said via a social media post that they would not support the budget. This is despite other parties having a lukewarm response to the budget that will be debated in Parliament.
Godongwana says the increase will raise R28 billion in additional revenue in 2025/2026 and R14.5 billion in 2026/207.
He added that if the spending reviews yield enough revenue, the additional 0.5 percentage point may be reassessed.