The Democratic Alliance (DA) fight against VAT hike that was set for the 1st of May 2025 has succeeded, this follows after the DA’s application to interdict the VAT increase. Their win comes after the Minister of Finance decision to forgo the increase. According to the DA this development marks a major victory for them, and it is a turning point in the fight to protect South Africans from unjustified financial burdens.
Speaking with the Democratic Alliance Spokesperson in Harry Gwala councillor Bradwyn Marnce shared that, the VAT increase could have made the lives of South Africans especially in Harry Gwala district more difficult, as it also affect the transport industry as well as many people depends on public transport which was going to increase transport fees making it more difficult. He also mentions that it was going to affect businesses as well, including retailers that supplies services to municipalities. “A lot of banks and consumers at local level who have varies debts and accounts were going to pay high interest rates due to the VAT increase,” he said. In addition the spokesperson said the increase could have contributed to a very high unemployment rate, and also an increase in criminal activities especially in small towns.
Meanwhile, According to the statement issued by the Department of Minister of Finance, it state that, the initial proposal for an increase to VAT rate was motivated by the urgent need to restore and replenish the funding of critical frontline services that had suffered reductions necessitated by the country’s constrained fiscal position. The statement further says there are many suggestions; however some of them would create greater negative consequences for growth and employment and some of them, while worthwhile, would not provide an immediate avenue for further revenue in the short term to replace a VAT increase.
