National Treasury has announced its decision to scrap the proposed half a percentage increase on value added tax (VAT).
A statement from the Minister of Finance, Enoch Godongwana, said as a result of the decision, revenue will fall short by about R75 billion.
Gondongwana said he would write to the Speaker of the National Assembly to withdraw the Appropriation Bill and the Division of Revenue Bill.
The Department said the decision to withdraw the increase in VAT is to cushion lower income households.