South Africa's revised budget proposes 1% VAT hike

South Africa's finance minister unveiled Wednesday a budget with a smaller increase in value-added tax than previously proposed, but it was immediately rejected by a key party in the unity government. 

Finance Minister presented the revised budget to parliament three weeks after his first version was withheld at the last minute because it included a two-percentage-point VAT hike that was widely rejected. The new version proposed raising VAT by one percentage point to 16 percent by the 2026/27 financial year, he said. 

This would be done in two steps, with a 0.5-point increase for the 2025/26 period and another for the following year, he added. The minister said the government also did not forsee inflation-linked increases to personal income tax brackets to finance its spending.