South Africa reverses VAT tax hike that threatened coalition government

South Africa’s President Cyril Ramaphosa’s African National Congress (ANC) has reversed a proposed 0.5% value-added tax (VAT) increase, which faced strong opposition from coalition partner Democratic Alliance (DA) and other parties. The finance ministry stated that this reversal, just days before implementation, would lead to a significant revenue deficit of 75 billion rand, potentially resulting in further tax increases or spending cuts. Finance Minister Enoch Godongwana acknowledged the decision would necessitate revisiting expenditure plans, as many South Africans face a stagnant economy and rising living costs.