The recent Value-Added Tax (VAT) hike saga led to South Africa’s third budget attempt on 21 May 2025. After the February postponement and March tabling sparked court challenges and public backlash, the VAT hike was reversed. CAs have a vital role in promoting fair tax policies and fiscal responsibility.
South Africa’s VAT saga reflects the complexities of balancing revenue needs with social equity. Initially, a 2% VAT hike was proposed, causing a February budget postponement amid coalition disagreements. A revised March budget suggested a gradual 1% VAT increase, but court challenges and widespread opposition forced a reversal. This left a R75 billion shortfall, compelling government to rethink fiscal strategies.
While VAT is broad-based and efficient, it disproportionately burdens poor and middle-class households, especially women-headed ones. Chartered accountants understand these fiscal realities deeply and are uniquely positioned to advocate for tax policies that do not exacerbate existing inequalities. They can highlight the regressive nature of VAT and champion more progressive alternatives, such as improved taxation on capital gains, wealth, and higher income brackets.
Beyond equitable tax advocacy, CAs must also promote innovative revenue-generation strategies for the state that reduce reliance on regressive taxes.
This includes pushing for reforms in tax administration, digital economy taxation, closing loopholes to improve compliance and revenue collection, and implementing strategies to curb tax evasion and illicit financial flows (IFFs).
Additionally, the profession plays a critical role in ensuring government accountability. By spotlighting fruitless and wasteful spending, CAs can help safeguard public funds, ensuring that limited resources are efficiently used to support social programmes and infrastructure.
As trusted advisors CAs can facilitate informed public discourse on fiscal policy, helping stakeholders understand the impact of taxation decisions and advocating for transparency and fairness in budget processes.
In a country grappling with inequality and constrained resources, the accounting profession’s voice is essential in shaping policies that are both financially sustainable and socially just. The VAT saga is a reminder that fiscal decisions have profound human impacts − and that accountants have a responsibility to ensure those decisions promote economic justice.
Chartered accountants and fair fiscal policy
Chartered accountants are crucial players in shaping South Africa’s fiscal landscape. Their expertise enables them to identify regressive tax impacts and promote
progressive alternatives.
They can, with intention, advocate for innovative revenue streams and hold government accountable for wasteful spending. Their voice can further strengthen public trust and advance economic equity.
Author
Refilwe Matenche CA(SA)
Founder and Principal Advisor of Thendo Advisory and Founder and President of the African Women’s Movement (AWM)
