South Africa Proposes Smaller VAT Hike to End Budget Impasse (2)

South Africa’s finance minister proposed scaling back tax increases and curbing spending in a bid to resolve a standoff over the budget in the nation’s fractious governing alliance.

He still has some way to go, with the second-biggest party in the coalition rejecting the latest plan before it had even been presented in parliament. The rand sank and benchmark government bond yields rose.

The National Treasury wants to raise value-added tax by 1 percentage point to 16% by mid-2026. The budget speech was called off last month after deep rifts emerged within President Cyril Ramaphosa’s administration over plans to ...