JOHANNESBURG - Political headwinds have forced the ANC to scrap its proposed VAT hike.
In a on Thursday night announcement, Treasury withdrew its plan to raise VAT to 15.5% from the 1st of May.
The move follows weeks of political infighting, legal threats, and growing rifts within the Government of National Unity.
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Treasury says the decision came after broad consultation, but the Democratic Alliance claims its legal challenge forced the U-turn, hailing it as a win for the public.
Either way, the climbdown, comes at a cost.
Political economist Patrick Bond spoke to eNCA.