The South African government has canceled a proposed tax increase that has threatened to collapse the unity government after a pushback from various political parties.

National Treasury's proposed 0.5% Value-Added Tax (VAT) increase is expected to be withdrawn when Finance Minister Enoch Godongwana introduces the Rates and Monetary Amounts and the Amendment of Revenue Laws Bill (Rates Bill) to Parliament.

South Africa's finance ministry has scrapped a proposed increase in VAT that threatened the stability of its 10-party unity government, raising concerns over budget shortfalls and economic stability.