South African leaders canceled a planned tax increase after strong opposition from their government partners. The African National Congress wanted to raise VAT, but the Democratic Alliance fought against it, even asking courts to step in. The tax hike would have started within days before officials changed course. The finance ministry stated they made this decision after talking with political parties, but warned about money problems ahead. The government might need other taxes or spending cuts to fill a 75 billion rand gap.
Many South Africans feel relief as they already struggle with high living costs. Finance Minister Enoch Godongwana had pushed for the increase to help poorer households. His plan faced pushback from various groups, even from people in his ANC party who thought it was harmful. Godongwana must withdraw programs meant to help low-income families because the tax increase failed. He plans to present a new spending plan soon.
The minister delayed his budget speech earlier this year because of fights over the VAT proposal. The Democratic Alliance claimed higher taxes would hurt people already dealing with money troubles. This disagreement happens during tough economic times for the country. About 25 percent of South Africans lack jobs and depend on government help. Treasury officials warn that public money faces growing pressure as needs increase.
Many South Africans feel relief as they already struggle with high living costs. Finance Minister Enoch Godongwana had pushed for the increase to help poorer households. His plan faced pushback from various groups, even from people in his ANC party who thought it was harmful. Godongwana must withdraw programs meant to help low-income families because the tax increase failed. He plans to present a new spending plan soon.
The minister delayed his budget speech earlier this year because of fights over the VAT proposal. The Democratic Alliance claimed higher taxes would hurt people already dealing with money troubles. This disagreement happens during tough economic times for the country. About 25 percent of South Africans lack jobs and depend on government help. Treasury officials warn that public money faces growing pressure as needs increase.
