UDM welcomes announcement that VAT will not be increased: our stance has been vindicated
Statement by Nqabayomzi Kwankwa, UDM Deputy President and Leader in Parliament
The United Democratic Movement (UDM) welcomes the announcement by the Minister of Finance that Value Added Tax (VAT) will not be increased on 1 May 2025.
This decision comes as a direct response to serious concerns raised by the UDM and other stakeholders regarding the potential impact of a VAT hike on already struggling South African households.
In a statement on 3 April 2025, the UDM clarified our position that we had voted for the 2025/2026 Budget Fiscal Framework with the strict proviso that “the Minister of Finance facilitates the receipt of substitute revenue proposals from the committee, together with corresponding expenditure savings, that will form the basis of an alternative revenue proposal instead of the proposed 0.5 percentage point increase in VAT for the 2025/26 financial year, effective 1 May 2025, in respect of which the committee has expressed serious concerns.” as articulated in Paragraph 6.29 of the “Report of the Standing Committee on Finance on the 2025 Fiscal Framework And Revenue Proposals, dated 01 April 2025”. The UDM furthermore took into consideration Paragraph 6.30 of the same document which reads: “…the committee recommends that the alternative revenue proposals and expenditure savings to balance the R28 billion shortfall which must effectively suspend the proposed increases be finalised and submitted by the committee to process within 30 days for consideration and adoption of this report by the house.”
The UDM is pleased that the Finance Minister has heeded this call, thereby prioritising the economic wellbeing of ordinary South Africans over regressive tax measures.
We will continue to champion equitable fiscal policy and work with all stakeholders to find creative, inclusive, and sustainable ways to raise revenue without deepening the burden on the most vulnerable members of society.
