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Cosatu members protests against VAT hike in Johannesburg on March 20, 2025.
The Congress of South African Trade Unions (COSATU) has refuted National Treasury’s statement that by not increasing VAT, the medium-term revenue shortfall will be R75 billion.
Media statement: Reversal of VAT rate increase #VATIncrease #VAT pic.twitter.com/NychMwsGAK
— National Treasury RSA (@Treasury_RSA) April 24, 2025
In a statement released just after midnight, Treasury announced that the proposed 0.5 percent VAT hike, which was meant to take effect on May 1, has been reversed.
It says Parliament will be requested to adjust expenditure to cover the shortfall in revenue.
The budget cuts in provision of public education put by @government @DBE_SA @Treasury are causing increased strain on teachers, says #SADTU @MorningLiveSABC pic.twitter.com/q6TzWLlZHe
— @COSATU Today (@_cosatu) April 24, 2025
COSATU Parliamentary Coordinator Matthew Parks says that the shortfall has decreased as a result of SARS’s improved tax collection.
“The shortfall is actually the R14 billion that the VAT was meant to have brought with the additional half-a-percent. And because the South African Revenue Service (SARS), through the excellent work of its staff, has already managed to overachieve its collection target by R9 billion, then the shortfall you’re actually talking about is very small. It’s R5 billion. We think a five-billion-rand adjustment in the allocations to departments and municipalities can be done over a cup of coffee, it’s not difficult. We should give SARS the space to continue to improve its tax collection targets before introducing new targets, especially ones which hurt the poor, and of course, there is space to reduce wasteful expenditure.”
VIDEO | COSATU reacts to VAT remaining at 15%:
