South African Ruling Coalition Intact as Treasury Drops Tax Hike

South Africa’s coalition government appears likely to remain intact after the National Treasury abandoned a divisive plan to raise taxes and agreed to revise the budget.

The Treasury in February proposed hiking the value-added tax rate by two percentage points to 17% over two years, sparking an outcry, and the proposed increase was halved three weeks later. But the Democratic Alliance, the second-biggest party in the administration, remained opposed to the move and challenged it in court, sparking a fight with the larger African National Congress.

South African Finance Minister Enoch Godongwana presents his budget speech to parliament on March 12.

Photographer: Dwayne Senior/Bloomberg

Concern among investors that the business-friendly DA could quit the so-called government of ...