UASA Media Release: 24 April 2025
Statement by Abigail Moyo, spokesperson of the trade union UASA:
UASA welcomes the announcement by Finance Minister Enoch Godongwana regarding the cancellation of the proposed VAT increase.
The decision is a victory for the hardworking people of South Africa, particularly the poorest of the poor, against the backdrop of limited growth prospects in an uncertain geopolitical and global environment.
We have seen all investment strategies presented before, as well as the increased taxes over the years. Yet, the government has not succeeded in growing the economy or reducing unemployment and the national debt to a level that harnesses economic growth and development.
The 0.5 percentage point VAT hike was to be implemented on 1 May, along with the new Rates and Monetary Amounts and the Amendment of Revenue Laws Bill (Rates Bill), which reverses the hike.
While this is excellent news for workers, the Treasury has warned that it will result in a R75 billion shortfall for the Fiscus.
UASA trusts that the government will recoup the income lost by cancelling the VAT increase. There are many ways that the government can cut expenses and accumulate funds to grow the economy without placing workers under more financial duress. Investigating the corruption and over-expenditure in state departments will go a long way.
Godongwana is also withdrawing the Appropriation Bill and the Division of Revenue Bill to propose expenditure adjustments to cover the shortfall. These two pieces of legislation were due to be considered by the National Assembly in May and June, respectively.
For further enquiries or to set up a personal interview, contact Abigail Moyo at 065 170 0162 .