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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
April 24, 2025
April 24, 2025

VAT Increase Scrapped

The proposed VAT increase has been canceled, as the Minister of Finance announced last night that the 0.5% hike will not go forward due to mounting political and public pressure. This decision follows legal action from the DA and EFF, which sought to block the increase, and criticism from the Parliamentary Budget Office (PBO).

A recent poll by the Institute of Race Relations revealed that the DA is now more popular than the ANC. Proposed measures like the VAT increase and other policy changes have negatively impacted public perception of the ANC and the Government of National Unity (GNU).

This situation, combined with lower economic growth forecasts from the IMF, poses significant challenges for government finances and tax collection efforts. These financial strains could hinder funding for current and proposed projects, such as the National Health Insurance (NHI) and the BEE Transformation Fund. Additionally, it raises concerns about South Africa’s ability to manage debt servicing costs and maintain essential service delivery in the medium to long term.

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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd

Frederick Mitchell

Frederick Mitchell is an economist with 16 years of experience, specializing in the intersection of politics, economics, and finance on both domestic and international levels.

His extensive background spans the private sector, where he worked in equity and investment, as well as the public sector, where he served as a senior economist at SARS.

As part of the Aluma team, Frederick leverages his expertise to identify sectors with growth potential and assess those with higher risk, providing valuable insights and strategic advice.

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