No VAT hike means more debt and spending cuts, warns Enoch Godongwana
Government will need to plug the R13.5bn shortfall in revenue if the 0.5 percentage point VAT hike is suspended, says finance minister
17 April 2025 - 13:47
The government will either have to increase its debt or implement spending cuts to plug a R13.5bn shortfall in revenue should the 0.5 percentage point VAT hike be suspended, finance minister Enoch Godongwana said.
The VAT hike, which comes into effect on May 1, would stabilise the government’s revenue streams in the short term, allowing increased spending in education, health and upholding debt repayments, which were estimated to increase to 76.2% of GDP in 2025/2026, Godongwana said. ..
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