JOHANNESBURG - The proposed VAT increase, which was meant to be implemented next month, has been reversed.
Treasury issued a statement shortly after midnight on Thursday.
The VAT rate was scheduled to rise to 15.5% on 1 May, but will now remain at 15%
Treasury says the decision was taken after considering recommendations of the Parliamentary committees and extensive consultation with political parties.
The proposed 0.5 percentage points has seen political parties putting pressure on Finance Minister Enoch Godongwana to reverse the decision.
Tensions have been mounting in the Government of National Unity with DA and the EFF challenging the proposed VAT increase in court.
Independent economic Analyst Bonke Dumisa, spoke to eNCA.