Cape Times 2025-03-14

The announcement of a staggered increase in value-added tax (VAT) by Finance Minister Enoch Gondongwana during his Budget speech on Wednesday has sent ripples of concern across South Africa's business sector and the civil society. With VAT set to rise by 0.5% in both the 2025/2026 and the 2026/2027 financial years, culminating in a total increase to 16%, stakeholders are increasingly vocal about the implications of this fiscal decision for both businesses and the general populace. To soften the blow of these increases, Gondongwana proposed expanding the basket of VAT zero-rated food items, set to include canned vegetables, dairy liquid blends, and organ meats from sheep, poultry, and other animals. However, many experts and advocates have argued that this may not be sufficient to alleviate the looming pressures on household…

In addition to mobilising investment, this partnership will be a forum for regulatory co-operation between the EU and SA The South African government has welcomed the €4.7 billion (R93.5bn) package announced by the European Union (EU) to support strategic investment projects in the country. During the SA-EU Summit in Cape Town on Thursday, leaders of the EU announced the multi-billion euro as part of the Global Gateway Investment Package. “We are presenting a new €4.7bn Global Gateway investment package for South Africa for projects that support a just energy transition, for connectivity – both physical and digital, and for vaccines, produced in Africa, for Africa,” said Ursula von der Leyen, President of the European Commission. “Today we’re taking our trade and investment relations forward. We’re launching talks on a next-generation…

The South African government has once again turned to taxation as a means of addressing its fiscal challenges, announcing an increase in the value-added tax (VAT) rate by half a percentage point in 2025/26 and another half a percentage point in 2026/27, bringing the final rate to 16%. This decision, though justified as necessary to fund critical social services, is yet another indication that the economy is caught in a self-perpetuating cycle of stagnation, increasing public debt, and over-reliance on a shrinking tax base. The key question we must ask is whether this increase is asustainable solution or merely a stopgap measure that exacerbates deeper economic challenges. A shrinking tax base and limited options The government has defended its decision to raise VAT by arguing that alternative revenue-raising measures, such…

South Africa’s productive sectors began the year on a slippery slope as both mining and manufacturing output plunged in January on the back of persistent economic constraints. Data from Statistics South Africa (Stats SA) on Thursday showed that mining production shrank by 2.7% year-on-year in January following a 2.4% decline in December 2024. This extends a three-month downward trend and marks the steepest decline since June 2024. Stats SA’s principal service statistician, Jean-Pierre Terblanche, said iron ore was the largest negative contributor, retreating by 15.1% while coal, platinum group metals (PGM) and chromium ore also performed poorly. Combined, these commodities make up over 65% of the mining basket. “On the upside, gold turned positive after 14 consecutive months of decline. Manganese ore, copper, nickel and diamond production also expanded in…

The Agricultural Business Chamber of South Africa (Agbiz) has expressed serious concerns regarding the nation's potential removal from the African Growth and Opportunity Act (Agoa). The apprehension follows US President Donald Trump’s decision last month to end USAID to South Africa, igniting fears of an impending economic setback. Wandile Sihlobo, chief economist of the Agbiz, on Thursday said the possibility of South Africa being expelled from Agoa would have a negative impact. “Tariffs could average around 3% on exports to the United States, which would significantly hurt South Africa’s access to the American market, ultimately weakening its competitiveness,” he said. Sihlobo added that there is growing international pressure and uncertainty surrounding the country’s trade relationship with the US. “I remain hopeful that South Africa will still be part…

Daybreak Farms is a going concern, the black-owned poultry producer, said on Thursday after media scrutiny in the wake of the resignation of its CEO, Richard Manzini, tasked with turning around the troubled firm. "Regarding recent media reports, we can confirm that Daybreak is not being liquidated. We value our relationships with all stakeholders, including Shoprite, and appreciate their ongoing support," it said in a statement sent to Business Report. This comes after Business Report earlier this week reported Financial troubles at Daybreak Farms: PIC's silence during management crisis. Media speculation is rife that its main shareholder, the Public Investment Corporation (PIC), allegedly rejected a request for an additional R250 million loan to aid the financially stressed company, leading to Manzini's abrupt exit. However, Daybreak said that Manzini had resigned…