Instead of the proposed increase to VAT announced in March, the Minister of Finance is expected to shortly introduce the Rates Bill, which proposes to maintain VAT at 15% from May 1.

In a statement the National Treasury said the decision to forgo the increase follows extensive consultations with political parties.

“The decision not to increase VAT means that the measures to cushion lower income households against the potential negative impact of the rate increase now need to be withdrawn and other expenditure decisions revisited.”