Announcements in the Budget Speech 2025, including the increase in the Value-Added Tax (VAT) rate, have sparked discussions about the best fiscal choices for South Africa’s future. With a focus on the theme 'Responsible growth for a sustainable future', this report examines the VAT increase announced recently, strategies to boost economic growth and the necessity for climate-resilient infrastructure.
Plans to increase tax rates might be less of a focal point if South Africa’s economy was growing at a healthier pace—there is a strong positive relationship between economic growth and tax revenue growth. One of the ways that South Africa’s economy can grow faster is through productivity gains. We know what the levers are that need to be pulled to accelerate South Africa’s productivity and economic growth, with energy, logistics and infrastructure being some of the main ones.
Through our Ubuntu Bethu (Our Humanity) strategy, PwC leverages our community of solvers to build trust and deliver sustained outcomes towards creating a more prosperous South Africa. To this end, we have asked a group of our brightest minds to consider how we, as a society, can improve upon some of the pertinent factors influencing the fiscal balance: how and where does tax money come from and how and where is it spent.
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