Treasury scraps VAT hike,faces R78bn shortfall

National Treasury’s decision to withdraw its proposed VAT hike has left a R78-billion gap in the national budget, forcing Finance Minister Enoch Godongwana to explore new ways to raise revenue and curb government spending. Treasury had initially planned to increase Value Added Tax (VAT) by 1%, moving it from 15% to 16%, in an effort to boost revenue. However, the proposal was met with swift public backlash, prompting its reversal on Thursday. Jacaranda FM news reporter Mmangaliso Khumalo spoke to Leonard Willemse, Director at AJM Tax, for more insight into the developments. Latest news on our website