South Africa: Ruling party retreats from VAT hike proposal
South Africa’s ruling African National Congress (ANC) is expected to abandon its proposal to increase the value-added tax (VAT) rate, according to a report by the Sunday Times. The retreat comes after several political parties made clear during parliamentary discussions that they would not support the 0.5 percentage point VAT increase included in the national budget.
A senior ANC leader told the Sunday Times that recent talks with parties represented in parliament demonstrated a lack of backing for the VAT adjustment. The ANC has been engaged in extended negotiations this week with both government and opposition parties to address the budget impasse.
The discussions follow the formation of a government of national unity, established after the ANC lost its parliamentary majority in the May elections—the first such loss since the end of apartheid in 1994. To remain in power, the ANC formed a coalition with the Democratic Alliance (DA) and other smaller parties.
Tensions within the governing coalition intensified after the DA, now the second-largest party, voted against a key piece of budget legislation. The proposal was approved in parliament without the support of the Democratic Alliance, after the ANC secured votes from smaller parties outside the unity government.
VAT/GST rates 2024 in Africa
| Country | Standard VAT/GST Rate | Reduced Rates |
| Algeria | The standard sales tax (VAT) rate is 19%. | A reduced rate of 9% applies to certain industries |
| Egypt | The VAT rate is 14% | 5%, 10% |
| Equatorial Guinea | The standard VAT rate is 15% | 6% |
| Ethiopia | The standard VAT rate is 15% | |
| Mauritania | The standard VAT rate is 16% | |
| Mauritius | The standard VAT rate is 15% | |
| Morocco | The standard VAT rate is 20% | 10% |
| Nigeria | The standard VAT rate is 7.5% | |
| South Africa | The standard VAT rate is 15% | |
| Tanzania | The standard VAT rate is 18% | |
| Tunisia | The standard VAT rate is 19% | 7%, 13% |
| Uganda | The standard VAT rate is 18% |