The Democratic Alliance (DA) has welcomed the reversal of the 0.5 percent VAT increase, which was meant to take effect next Thursday.

National Treasury earlier this morning announced the reversal of the controversial VAT hike following extensive consultations with political parties.

National Treasury says that by not increasing VAT, the estimated revenue shortfall will be around R75 billion over the medium term.

DA National spokesperson Karabo Khakhau says this is a vindication for all South Africans.

“This vindication is not the DA’s but that of South Africans. South Africans have made it clear from the onset that they do not have more rands or cents to spend additionally on food and basic essentials. Altogether, this is a victory and had the DA not gone to court then, the minister’s legal team would not have sought for an out-of-court settlement on this matter. And perhaps we wouldn’t have even seen the scrapping of the VAT increase altogether. So, we are saying as the DA to South Africans that our commitment to the fight to ensure that come the 1^st of May, there will not be a VAT increase has come to fruition. And it is a fight that we are happy to have fought together with South Africans.”

ActionSA reaction

Meanwhile, ActionSA says it has followed through on its commitment to stop the VAT hike and applauded National Treasury’s announcement of the reversal of the zero-point-five-percent increase.

Party leader, Herman Mashaba, says: “Remember after our proposal which we tabled in the standing committee on the 1st of April and in Parliament on the 2nd of April, the following day – we committed to South Africans that there won’t be a VAT increase come the 1st of May. And a few days later we submitted, and we did communicate to South Africans that we’ve submitted proposals to National Treasury to the value of just over R110 billion of other revenue streams. But obviously we needed to give them the space to do that.”

Action SA Parliamentary leader, Athol Trollip, says they are proud of being a constructive opposition party that resulted in the reversal of the proposed VAT increase.

The party says that although it voted in favour of the passing of the Fiscal Framework and Revenue Proposals, its position was clear that it was against a VAT hike.

“What is really interesting about this decision is that it just shows that in South Africa, if you talk together, talk to each other to solve and sort out any impasse, it’s much better than recriminating and litigation,” adds Trollip.

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-Additional reporting by Lulama Matya