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Rand strengthens following VAT increase cancellation
Cape Argus
|April 25, 2025
THE rand showed signs of recovery yesterday, strengthening slightly after Finance Minister Enoch Godongwana announced the government' decision to abandon the contentious Value Value Added Tax (VAT) increase.
The move, made public during a morning briefing, has been welcomed by various sectors including business and civil society, propelling the rand to a value of R18.6650 against the US dollar, marking a modest gain of 0.1% from the previous day’s close.
The proposed 0.5 percentage point hike, which was set to take effect on May 1, had been introduced in the February National Budget to help bridge a significant R75 billion fiscal shortfall.
However, this proposal quickly found itself at the centre of a heated debate, facing mounting opposition from a coalition of business leaders and social advocates.
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